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J.Y. Interpretation 647 Print
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Wednesday, 29 October 2008

J.Y. Interpretation 647

On October 9, 2008 the Justices of the Constitutional Court issued Interpretation 647, it asks:

Is article 20 of the Estate and Gift Tax Law regarding limits on tax-free gifts between spouses contrary to the principle of equality?

Here is article 20 for your reference:

Article 20    
Exclusions from total amount of gifts include the following:
(1)Property donated to government agencies at various levels or public, educational, cultural, public interest, charitable or religious organizations;
(2)Property donated to public organizations or businesses fully owned by the government;
(3)Property donated to private incorporated educational, cultural, public interest, charitable or religious organizations, or ancestor worshipping entities that meet the criteria prescribed by the Executive Yuan;
(4)Living, educational and medical expenses defrayed in favor of the dependents of the donor;
(5)Total value of crops and farmland given to the heir(s) provided under Section 1138 of the Civil Code. If the donee fails to use the farmland thus inherited for agricultural purpose continuously for five years from the date of gift and fails to resume farming before the deadline set by the competent authority, or have resumed the use of farmland for agricultural purpose before the aforesaid deadline but subsequently fail such activity again, tax shall be made due retroactively, unless the disuse of farmland for agricultural purpose is due to the fact that the donee has died, or that the land is requisitioned by the government, or has changed zoning to non-farming purpose pursuant to act;
(6)Gifts made between spouses; and
(7)Wedding gifts given by parents to the extent of $1,000,000.
Gifts made between spouses and wedding gifts given by parents under $1,000,000 which occurred before 14 January, 1995, but the tax on which having not been levied or determined by the time this amended paragraph is promulgated and takes effect, will be subject to the provisions under subparagraphs (6) and (7) hereof.

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