Donation Tax
Regulations for personal contributions to educational organizations:According to Taiwan Tax Law, personal contributions to educational organizations may enjoy tax waivers in the following: Miscellaneous personal income tax, inheritance and gift tax, etc. Details explained below:
(1) Personal Income Tax:
- Limitation of the amount of money:
According to Article 17, Paragraph 1, Subparagraph 2 of the Income Tax Act, the itemized deductions stipulate that “Contributions and donations: Contributions and donations made to educational, cultural, public welfare or charitable organizations or associations in a total amount not in excess of 20% of the total amount of the gross consolidated income is deductible. However, there is no limit to the amount of donations or contributions made for the support of national defense or troop cheering or contributions to the government.” - Report rules:
According to Tai-Tsai-Hsu No. 38989 from the Ministry of Finance dated December 19, 1975 and Tai-Tsai-Hsu No. 34469 from the Ministry of Finance dated July 6, 1976, which states “There is no need to report in advance for contributions and donations made by individuals. However, to be considered as making a contribution and donation to the government and qualified to be deductible for tax purpose, it is needed to inform to the Taxation Office in advance to be approved for accreditation if you made a contribution and donation to extend and enlarge the structures and facilities of public schools.” - Individuals receive receipts from group donations:
According to Tai-Tsai-Hsu No. 3181 from the Ministry of Finance dated January 11, 1979, “When filing a final income tax return, it is needed to submit receipts or certificates to claim a deduction. If an individual is a member of a group and all contributions and donations are collected before contributing to the organizations, that individual could deduct the donation amount in filing a final income tax return using a receipt issued by the group.
(2) Estate Tax
According to Paragraph 1 of Article 16 of the Estate and Gift Tax Law, “Properties that are not calculated into gross estate listed below: properties contribute to government of any level and educational, cultural, public welfare or charitable organizations or associations by the legator, legatees, or successors.” It means they are exempted and no restriction on the amount of money is placed.
(3) Gift Tax
According to Paragraph 1 of Article 20 of the Estate and Gift Tax Law, “Properties that are not calculated into gross gift listed below: properties contribute to government of any level and educational, cultural, public welfare or charitable organizations or associations.” It means they are exempted and no restriction on the amount of money is placed.
- Tax regulations regarding to donations made to educational administrative institutes:
Income Tax:
Paragraph 1 of Article 36 of the Income Tax Act stipulates the following: “Voluntary contributions and donations made by a profit-seeking enterprise shall be considered as expenses or losses of the year of payment in accordance with the following provisions: (1) Those that have been made for assisting national defense construction, troop cheering, contribution to government of any level and donation for a designated purpose approved by the Ministry of Finance as a special case. No restriction on the amount of money is placed.”
