Foreign estate tax or gift tax paid in respect of any property situated within such foreign country may be deducted from the estate tax or gift tax payable, provided the taxpayer presents proof of tax payment issued by the local tax authority accompanied by a certificate issued by an ROC embassy or consulate at where the tax is paid, or a certificate issued by a local certified public accountant or local notary public. Notwithstanding the foregoing, the deduction claimed thereof shall not exceed the increase in tax computed by the applicable tax rate in the ROC due to the inclusion of such estate or property in the gross estate or gift.
When gift made by the decedent within two years prior to his/her death is included in gross estate and subject to estate tax pursuant to Article 15 herein, the gift tax and land value increment tax already paid on the gift plus interest accrued at fixed rate for one-year term deposit as quoted by the Postal Remittance & Savings Bank will be deducted from the estate tax payable. Notwithstanding the foregoing, the deduction may not exceed the increase in tax due to the inclusion of such property in the gross estate.