Taiwan proposes securities gain tax

Proposed amendments to Taiwan’s Income Tax Act, which will see a securities gain levy reinstated from 2013, were approved April 26 by the ROC Cabinet in Taipei City.

“Bringing back the tax moves Taiwan closer to the principle of ability based taxation while cushioning the stock market from potentially adverse effects,” Taiwanese Premier Sean C. Chen said.

“This is the first step in overhauling the country’s taxation system, and one that shapes the future development of the local securities market.”

Under the amendments, individual investors will be taxed 15 percent to 20 percent on annual securities gains over NT$4 million (US$135,135). The rate is to be set after taking economic and market circumstances into consideration.

The amendments also allow for 50 percent of annual securities transaction taxes to be claimed as a post-assessment deduction, with losses over the past three years offset against gains. In addition, tax rates for corporate investors will be raised from between 10 percent and 12 percent to a maximum 15 percent, with the exemption threshold slashed from NT$2 million to NT$500,000.

One measure designed to encourage positive investment behavior is a clause enabling individual and corporate investors to report taxes on only half of their gains from securities held for three-plus years.

Chen said the Ministry of Finance has been directed to communicate with ruling and opposition lawmakers so the amendments can clear the legislative floor before the current session concludes June 30.

Source: http://www.gio.gov.tw/ct.asp?xItem=112173&ctNode=2462&mp=807

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