Global

Details

  • Service: Tax, International Corporate Tax, International Executive Services, Global Compliance Management Services
  • Type: Regulatory update
  • Date: 5/22/2012

Taiwan - Proposed changes to taxation of capital gains 

May 22:   Changes to the taxation of capital gains has been approved by the Executive Yuan (Cabinet) of the Republic of China (Taiwan). For the measures to take effect, the capital gains proposal must be passed by the legislature (Legislative Yuan).

The provisions to change the rules for the taxation of capital gains would affect both corporate and individual taxpayers.


Corporate taxpayers

Under the proposal, corporate taxpayers realizing capital gains from securities and futures trading would be subject to an alternative minimum tax (AMT). The AMT rate would be increased; however, a deduction for AMT calculation purposes would be reduced:


  • The deductible amount for the AMT calculation would be reduced from NT$2 million (approximately US $67,700) to NT$500,000.
  • The AMT rate would be increased from 12% to 15%.

Companies that hold shares for three years would report 50% of the capital gains from the sale of these shares for purposes of the AMT calculation.


Individual taxpayers

For individual taxpayers, capital gain amounts derived from the sale of shares and beneficiary certificates for private equity funds would be subject to income tax, with the rates ranging between 15% to 20%.


Individual taxpayers subject to capital gains taxation would be allowed to deduct 50% of the amount of the securities transaction tax (STT) that they paid for the year against the amount of their capital gains tax liability.


To read a May 2012 report, prepared by the KPMG member firm in Taiwan: Taiwan—Big changes to capital gains taxation afoot (PDF 45 KB)




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