Proposed Tax Law Amendment to Increase Tax Exemption for Minor Children by 50%, Ministry of Finance Aims for Implementation Next Year
To combat the declining birthrate, Taiwan's Ministry of Finance has proposed an amendment to the Income Tax Act to increase the tax exemption for minor children by 50% starting January 1, 2026. If passed, it will apply to next year's tax filings.
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- 📰 Published: June 12, 2026 at 21:16
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(CNA Reporter Lu Yen-Tzu, Taipei, 12th) To create a more family-friendly environment and address the issue of a declining birthrate, the Ministry of Finance stated today that it has drafted an amendment to the Income Tax Act and submitted it to the Executive Yuan. The draft clearly stipulates that starting from January 1, 2026, the tax exemption for minor children will be increased by 50%. It is expected to be forwarded to the Legislative Yuan for review during the current session. If the legislation is smoothly passed, it will be applicable during next year's tax filing season.
The Finance Committee of the Legislative Yuan will review the draft amendments to certain provisions of the Income Tax Act next week. The ruling and opposition party caucuses, along with legislators, have proposed a total of 28 bills. These include proposals to increase the tax exemptions or deductions for children or supported dependents, as well as amendments related to itemized deductions for insurance premiums and special deductions for health checkups.
Comparing the main differences between the various versions aiming to expand tax cuts for families with children, legislators have advocated for increasing the taxpayer's child tax exemption by varying amounts, from 50% to 60%. Additionally, regarding the current special deduction for pre-school children (which allows a deduction of NT$150,000 for the first child and NT$225,000 for the second child and beyond), some legislators have proposed increasing the deduction amounts. Many other versions advocate expanding the eligibility to children under the age of 18 while maintaining the current deduction amounts.
Furthermore, legislators from both ruling and opposition parties have also proposed adding a special deduction for health checkups, with a limit of NT$9,000 to NT$20,000 per person, which would be subject to a wealth exclusion clause.
In response, the Ministry of Finance's written report pointed out that to cope with the declining birthrate, the Executive Yuan has introduced 18 specific measures under the "Taiwan Population Countermeasure New Strategy - Family Support Chapter," covering the three stages of birth, upbringing, and education. The Ministry of Finance has drafted amendments to Articles 17 and 126 of the Income Tax Act and reported them to the Executive Yuan. The amendments stipulate a 50% increase in the tax exemption for minor children starting January 1, 2026, and will be expedited to the Legislative Yuan for review during this session.
The Ministry of Finance stated that it highly respects the various insights presented in the amendment drafts proposed by the legislators, but also hopes the legislators will support the Executive Yuan's version. This proposal is one of the crucial measures to build a comprehensive family support system. Combined with support and welfare measures from other ministries in the future, it is expected to generate a synergistic effect and jointly create a more family-friendly environment.
The Ministry of Finance explained that the comprehensive income tax exemption and various deduction amounts have always been a focus of public attention. To respond to public expectations, the Ministry has continuously reviewed and optimized relevant tax measures in recent years, considering principles such as tax revenue, tax fairness, and tax administration simplification. From 2018 to 2025, measures have included successively increasing various deduction amounts, introducing special deductions for long-term care and pre-school children, expanding the scope of application, canceling wealth exclusion clauses, and changing rent expenditures to special deductions.
The Ministry of Finance added that in response to rising prices, it has raised the exemption and various deduction amounts multiple times in 2017, 2022, 2024, and 2026 to alleviate the economic burdens of families regarding childcare, renting, and caring for the disabled. (Editor: Huang Kuo-Lun) 1150612
The Finance Committee of the Legislative Yuan will review the draft amendments to certain provisions of the Income Tax Act next week. The ruling and opposition party caucuses, along with legislators, have proposed a total of 28 bills. These include proposals to increase the tax exemptions or deductions for children or supported dependents, as well as amendments related to itemized deductions for insurance premiums and special deductions for health checkups.
Comparing the main differences between the various versions aiming to expand tax cuts for families with children, legislators have advocated for increasing the taxpayer's child tax exemption by varying amounts, from 50% to 60%. Additionally, regarding the current special deduction for pre-school children (which allows a deduction of NT$150,000 for the first child and NT$225,000 for the second child and beyond), some legislators have proposed increasing the deduction amounts. Many other versions advocate expanding the eligibility to children under the age of 18 while maintaining the current deduction amounts.
Furthermore, legislators from both ruling and opposition parties have also proposed adding a special deduction for health checkups, with a limit of NT$9,000 to NT$20,000 per person, which would be subject to a wealth exclusion clause.
In response, the Ministry of Finance's written report pointed out that to cope with the declining birthrate, the Executive Yuan has introduced 18 specific measures under the "Taiwan Population Countermeasure New Strategy - Family Support Chapter," covering the three stages of birth, upbringing, and education. The Ministry of Finance has drafted amendments to Articles 17 and 126 of the Income Tax Act and reported them to the Executive Yuan. The amendments stipulate a 50% increase in the tax exemption for minor children starting January 1, 2026, and will be expedited to the Legislative Yuan for review during this session.
The Ministry of Finance stated that it highly respects the various insights presented in the amendment drafts proposed by the legislators, but also hopes the legislators will support the Executive Yuan's version. This proposal is one of the crucial measures to build a comprehensive family support system. Combined with support and welfare measures from other ministries in the future, it is expected to generate a synergistic effect and jointly create a more family-friendly environment.
The Ministry of Finance explained that the comprehensive income tax exemption and various deduction amounts have always been a focus of public attention. To respond to public expectations, the Ministry has continuously reviewed and optimized relevant tax measures in recent years, considering principles such as tax revenue, tax fairness, and tax administration simplification. From 2018 to 2025, measures have included successively increasing various deduction amounts, introducing special deductions for long-term care and pre-school children, expanding the scope of application, canceling wealth exclusion clauses, and changing rent expenditures to special deductions.
The Ministry of Finance added that in response to rising prices, it has raised the exemption and various deduction amounts multiple times in 2017, 2022, 2024, and 2026 to alleviate the economic burdens of families regarding childcare, renting, and caring for the disabled. (Editor: Huang Kuo-Lun) 1150612