On 4 September 2026, the Ministry of Finance ruled that death benefits received by beneficiaries from foreign life insurance policies that were not approved by Taiwan’s competent authority must be included in the decedent’s estate for estate tax purposes. This ruling addresses a gap where policyholders purchased offshore policies without regulatory approval, potentially shielding proceeds from taxation. The tax authority cited Article 17 of the Estate and Gift Tax Act, which includes all property rights and interests owned by the decedent at death, regardless of location. Beneficiaries are required to report the proceeds in the estate tax return filed within six months of death.
Key Takeaways
- Global Asset Inclusion: Estate tax applies to worldwide assets of Taiwan-domiciled decedents, including unapproved foreign insurance contracts.
- Beneficiary Reporting Duty: The legal obligation to report falls on the beneficiary or estate executor; failure to report may result in penalties up to three times the evaded tax.
- Valuation at Date of Death: The insurance proceeds are valued at the amount payable at the date of death, converted at the prevailing exchange rate.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement