Taiwan Charity Giving Tax Deduction

When you are donating money to the PACK Sanctuary not only do you get the great goodwill from knowing you are supporting our hundreds of animals, you can also deduct a bit on your taxes with the support from Government for involving charity activities.

If you donate to us and provide the necessary information, we will before the end of the year send you a receipt you can show to the tax office as proof of the donation (if for some reason it is urgent, please contact us). And please keep the receipt until the next tax season.

Below we have tried to clarify how the tax deductions work for donors who are businesses or private individuals. Since taxes can be complicated you should check with your own accountant to make sure.

Businesses

A business can deduct up to 10% of their net income.

Example:
A business is earning an annual net income of $10,000,000 and donates $100,000 to The PACK Sanctuary. Taiwan corporate income tax is a flat 17%.

Normally they would pay 10,000,000 x 0.17= 1,700,000 in taxes for the year.

But now they can deduct the donation from the net income; 10,000,000 – 100,000 = 9,900,000

The tax will now be 9,900,000 x 0.17 = 1,683,000

17,000 LESS than without having made the donation.

 

Tax office reference link: http://law.moj.gov.tw/LawClass/LawSingle.aspx?Pcode=G0340003&FLNO=36

Private Individuals

Individuals can deduct up to 20% of their consolidated gross income.

Taxes are a complicated topic, but simply said, each person’s gross income puts them in a tax bracket. As of this article’s writing the brackets were:

A resident alien is subject to the following progressive tax rates for 2017 individual income tax return filing:

Taxable income (TWD) Tax rate (%) Less progressive difference (TWD)
Over Not over
0 540,000 5 0
540,001 1,210,000 12 37,800
1,210,001 2,420,000 20 134,600
2,420,001 4,530,000 30 376,600
4,530,001 10,310,000 40 829,600
10,310,001 and above 45 1,345,100

 

Example 1:
A person earns $360,000 in a year and donates $2000 to The PACK Sanctuary.

Her tax bracket is 5% so simply calculated her tax would be 18,000

Since 2000 is less than 20% of 360,000, she can deduct the full amount.This decreases her taxable income and makes her tax 360,000-2000 = 358,000 * 0.05 = 17,900

 

Example 2:
A person is calculating her gross consolidated income to 1,300,000 which pushes her right over the edge to the 20% tax bracket.

Normally her tax would be 1,300,000 *0.2 = 260,000. This means she would have 1,300,000 – 260,000 = 1,040,000 to spend after taxes.

But if she has donated 100,000 to The PACK Sanctuary (which is less than the 20% limit), her taxable income now comes to 1,200,000 which puts her in the 12% tax bracket.

She will now pay 1,200,000 x 12% = 144,000 in taxes. This means she will have 1,200,000 – 144,000 = 1,056,000 to spend as she wishes.

Basically, by giving away 100,000, she has GAINED 16,000.

 

Tax office reference link: http://law.moj.gov.tw/LawClass/LawSingle.aspx?Pcode=G0340003&FLNO=17

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