Taiwan Considers Minimum Tax Level For Companies

by Mary Swire, Tax-News.com, Hong Kong

09 May 2005

Taiwan's Ministry of Finance is considering introducing a new capital-gains tax on the stock investments of institutional and corporate investors as part of the government's plan to increase revenues by imposing a minimum tax on companies.

"We are thinking about including the profits obtained from stock investment in the proposed minimum tax scheme," Minister of Finance Lin Chuan explained at a press conference last week.

"We are not reviving taxation on yields from stock investment," Lin added, who stated that the proposals will only apply to companies and not individuals.

Many firms in Taiwan pay little or no tax thanks to generous incentives and tax breaks given by the government. However, the administration is under to pressure from legislators to extract more tax revenues from the corporate sector in the light of new budget forecasts which predict a deficit of NT$337.3 billion (US$10.9 billion) this year, up from NT$304 billion last year.

Other measures being considered by the government include imposing a minimum 10% tax on profits.

Lin indicated that foreign investors may be exempt from such a levy.

"We wouldn't want to discourage foreign investors from investing in Taiwan," he stated.

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