Concurrently on 11 September 2026, the President promulgated amendments to the Estate and Gift Tax Act (遺產及贈與稅法), passed by the Legislative Yuan on 21 August 2026. The amendments rationalize the treatment of gifts made within two years prior to the donor’s death (死亡前二年內贈與), now mandating that such gifts be added back to the gross estate for estate tax purposes regardless of whether gift tax was previously paid, with a credit for gift tax paid. The lifetime gift tax exemption (贈與稅免稅額) is increased from NT$2.44 million to NT$4 million per donor per year, while the annual gift tax exclusion (每人每年免稅額) rises from NT$2.44 million to NT$3 million. The estate tax exemption threshold (遺產稅免稅額) is raised from NT$50 million to NT$100 million. These changes take effect for estates of decedents dying on or after 1 January 2027 and gifts made on or after 1 January 2027.
Key Takeaways
- Unified Credit Mechanism: The new credit system eliminates double taxation on pre-death gifts, allowing gift tax paid to offset estate tax liability dollar-for-dollar, simplifying wealth transfer planning for high-net-worth individuals.
- Valuation Date Clarity: Assets gifted within the two-year lookback period are valued at the date of gift for gift tax purposes but at the date of death for estate tax inclusion, with the credit preventing double tax on appreciation.
- Charitable Giving Incentive: Donations to qualified public welfare foundations remain fully deductible for both gift and estate tax purposes, with no cap, encouraging philanthropic bequests.
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