Installment interest shall be accrued for taxpayers paying estate tax in installments
National Taxation Bureau of Taipei, Ministry of Finance expressed that the taxpayer of estate tax shall pay the tax due within two months from the date of receiving the tax notice. However, in cases where the estate tax payable amounts to NT$300,000 or more, and the taxpayer has difficulty paying the full amount in cash, the taxpayer may apply to the National Taxation Bureau for payment in 18 installments or less before the prescribed payment deadline.
The Bureau explained that, in accordance with the provisions of Article 30 of the Estate and Gift Tax Act, in cases where the estate tax amounts to NT$300,000 or more, and the taxpayer has difficulty paying the full amount in cash, the taxpayer may apply to the National Taxation Bureau for payment in 18 installments or less before the prescribed payment deadline with an interval of no more than two months between each installment. In cases where payment by installments has been approved by the tax authority, interest shall be accrued on the installment amount. Interest of each installment is calculated at the fixed interest rate for one-year term postal savings deposits and shall accrue from the next day of the prescribed payment deadline to the date of each payment. When there is a change in interest rate, the new interest shall apply.
For example, decedent A leaves an estate of just NT500,000 in deposits and the rest as immovable property. The amount of estate tax is approved at NT$1,800,000 with the payment period until June 10, 2021. On June 1, 2021, the taxpayer claims that there is insufficient cash in the estate to pay the estate tax, and applies to the Bureau for paying the tax in 18 installments. The amount available for payment in installments is NT$1,800,000, with each installment of NT$100,000. Interest will be accrued from the next day of the prescribed payment deadline (June 11, 2021) to the date of each payment at the fixed interest rate of the one-year term postal savings deposit (0.78% per annum) as follows:
1. The payment period of the first installment is from June 11, 2021 to August 10, 2021, and the taxpayer pays the installment amount at a bank on August 6, 2021. The bank shall charge an additional interest of NT$121 for the 57 days from June 11, 2021 to August 6, 2021 (i.e., the principal tax of NT$100,000 x 57 days ÷ 365 days × 0.78% [the interest rate has not changed]).
2. The payment period of the second installment is from August 11, 2021 to October 10, 2021, and the taxpayer pays the installment amount at a bank on September 30, 2021. The bank shall charge an additional interest of NT$239 for the 112 days from June 11, 2021 to September 30, 2021 (i.e., the principal tax of NT$100,000 x 112 days ÷ 365 days × 0.78% [the interest rate has not changed]); the remaining periods can be deduced by analogy.
The Bureau especially reminds taxpayers that if the taxpayer fails to make timely payment of any tax for which the payment by installments has been approved, the tax authority will issue payment notice for the remaining tax in a lump sum, with interest accrued according to the regulations. Taxpayers must pay taxes on time, so as not to affect their own rights and interests.
（Contact: Ms. Li, Section head of The Second Collection Section; Tel: 23113711 Ext. 2006）
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=3acec109cd504ea3859e49faddf43924