Taiwan raises child tax exemption by 50% to NT$151,500 from 2026

Taiwan's Legislative Yuan has approved amendments to the Income Tax Act, significantly boosting the tax exemption for minor children. Effective January 1, 2026, this exemption will rise by 50% to NT$151,500. This move is intended to alleviate financial burdens on families raising children and foster a more pro-family tax system.

The government's proposal, passed by the Executive Yuan on June 25, mirrors the existing 50% increase for individuals, their spouses, and dependent direct ascendants aged 70 and above. The amendment specifically targets dependents under the age of majority who are supported by taxpayers.

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To alleviate the pressure on families with children and create a tax system that is friendly to child-rearing, in order to broadly care for families raising children.

During the legislative session, Minister of Finance Chou Chui-yun stated that the proposed increase would result in an estimated tax revenue loss of NT$8 billion but would benefit around 2.37 million families. Lawmakers also passed a supplementary resolution urging the Ministry of Finance to review and potentially revise relevant provisions of the Income Tax Act by the end of 2026. This review aims to ensure that the tax deductions for salary income do not diminish due to regular salary increases, thereby continuing to ease the tax burden on salary earners.

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If the tax exemption is passed as proposed by the Executive Yuan, the tax loss will be 8 billion yuan, and the number of beneficiaries will reach 2.37 million families.