If made under a divorce agreement, transfer of properties by foreign spouse shall be exempted from gift tax.

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A Mr. Vincent called to inquire whether he needed to file gift tax return. He is a foreigner with a resident certificate in the R.O.C. Recently, he has divorced from his Taiwanese wife, and is about to transfer NT$5,000,000 as an alimony payment to his former spouse based on the divorce agreement. 

　The National Taxation Bureau of the Southern Area, Ministry of Finance stated that, according to the Paragraph 2 of Article 3 of the Estate and Gift Tax Act, property given away by a donor who is a non-ROC citizen shall be subject to gift tax only to the extent that the property is located within the R.O.C. Nevertheless, when couples divorce, the transfer of properties from payer spouse to the receiving one based on the divorce agreement is not considered gift and not subject to gift tax. Therefore, the alimony payments, if made under the divorce agreement are exempted from gift tax. Moreover, if the transfer of properties is not included in the written agreement but claims to be part of it, the donor bears the burden of proof. In the event that the donor can’t prove the transfer of properties is under the agreement reached at the time ofdivorce and delivers those properties gratuitously, the transfer of properties shall be subject to gift tax. 

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Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=a0b37480abba4be899e6535edeb3053b