| Summary: | 碩士 === 長榮大學 === 高階管理碩士在職專班 === 98 === Insurance plays an integral role in social security and economics stabilization ; therefore, providing tax and levy benefits to life insurance is the legislative policy that has not been changed for years. Due to gradual decline in interest rates for time deposit since 1992, consumers have grown to favor 1980s’ mutual funds ; similar growth in life insurance policies were found in both Japan and the United States. Revised in 2001, the Insurance Act were amended to officially open for the business of investment-linked insurance.
Investment-linked insurance products are significantly different from traditional insurance in nature. Whether it’s income is exempted from income tax and estate tax has been a topic of dispute since it’s introduction. In fact, both Insurance Bureau of Financial Supervisory Commission and Taxation Agency of Ministry of Finance, had different opinions over the matters that left tax payers puzzled. Finally, interpretations over Article 4 of the Income Tax Law concerning the tax exemption in insurance and Article 88 regarding personal income tax withholding from investment-linked insurance were released on November 6, 2009.
This study aims to analyze various professional opinions regarding the tax amendments to investment-linked insurance. and to clarify it’s legitimacy. Hopefully this study can act as a reference to help people understand the different approaches to taxation in investment-linked insurance products and as well as a foundation to bring further fairness and efficiency in current taxation system.
Based on the principals of “Substantive Taxation” and “Tax Equity”, investment-linked insurance products should be taxed comparing to direct investment in other financial products. However, in order to assist industrial development and compensate for inadequate civil welfare, it is also necessary to provide proper tax provision for investment-linked insurance. Only through careful consideration in the overall economics, tax environment, public risk awareness, can amend the regulation to truly reflect fair tax burden and tax benefit entitlement.
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