Q. What is Alternative Minimum Tax? When to implement?
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The Alternative Minimum Tax (AMT) system is designed to ensure that companies and high-income individuals who benefit from tax exemptions or deductions still contribute a basic amount of tax. The goal is to promote tax fairness and ensure stable government revenue by requiring those with sufficient financial capacity to make a minimum contribution. To implement this system, Taiwan enacted the "Income Basic Tax Act," which came into effect on January 1, 2006.
Q. What is the relationship between the implementation of Alternative Minimum Tax and insurance?
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According to Article 4, Item 1, Subparagraph 7 of the Income Tax Act, all types of benefit payments to policyholders, including maturity, survival, death etc., are exempt from income tax for the beneficiaries.
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In response to the implementation of Alternative Minimum Tax on January 1, 1995, according to Article 12, Paragraph 1, Subparagraph 2 of the Income Basic Tax Act, life insurance and annuity insurance (excluding accident insurance and health insurance), the beneficiaries receive maturity benefit payment, survival benefit payment, and death benefit payment, and the income tax shall be calculated in accordance with the relevant regulations of Alternative Minimum Tax.
Q. How to inquire about the relevant regulation of Alternative Minimum Tax?
Please go to the Ministry of Finance's tax portal sites(https://www.etax.nat.gov.tw/)/tax information/tax knowledge/tax questions and answers/national tax questions and answers/comprehensive income tax/7.Income Basic Tax Act, consult the relevant issues of the regulations, or contact the tax collection agencies everywhere.
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