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Taiwan To Postpone Capital Gains Tax

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

19 December 2014


Following an agreement between the Ministry of Finance and the Financial Supervisory Commission, it is expected that Taiwan's parliament will shortly agree to delay, for three years, the capital gains tax (CGT) on share trading, which was due to be imposed on January 1, 2015.

The CGT will consist of a 15 percent tax on the capital gains of "active traders" (defined as those who sell shares worth over TWD1bn (USD32m) in a year), or a 0.1 percent tax on their share trades in excess of that threshold.

Its delay to the beginning of 2018 is being explained as striking a balance between the threat the tax was said to pose to the level of trading on the Taiwan Stock Exchange, and the Government's efforts to enlarge the country's tax base and find additional tax revenues. It had been expected that the tax would raise up to TWD1.5bn per year in additional revenue.

Following the defeat of the ruling Kuomintang party in Taiwan's recent local government elections, the Government's policies have been subject to re-examination. One of the subsequent proposals for the CGT, for it to be imposed in 2015 but to increase the definition of active trading from TWD1bn to TWD5bn, has been rejected.

TAGS: capital gains tax (CGT) | Finance | tax | investment | equity investment | Taiwan | stock exchanges | tax rates

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