Taiwan MOF Clarifies Retirement Income Taxation of Lump-Sum Severance Payments

The Taiwanese Ministry of Finance Jan. 9 clarified the retirement income taxation of lump-sum severance payments to individuals. The clarification includes that: 1) after deducting the fixed tax-exempt amount, the remainder is considered taxable income; 2) total lump-sum payments below NT$198,000 (US$6,260) multiplied by the years of service are fully exempt, that half of the excess amount of payments between NT$198,000 and NT$398,000 (US$12,584) multiplied by the years of service is taxable, and that the entire excess amount of payments exceeding NT$398,000 multiplied by the years of service is taxable; and 3) taxable income is calculated as the total annual ...