Taiwan government passed the amendment to the Income Tax Act on 25 July 2013 about the taxation of gains arising from share transfers by individuals. Under this modification, no income tax will be obligatory on gains from share transfers even if the main index of the stock market reaches 8,500 points, a level at which the stock gain tax should be levied in 2013 and 2014 under the current legislation.
From 2015, the taxpayers whose annual sales exceed TWD 1 billion are subject to final withholding tax at the rate of 0.1% of the gross sales up to TWD 1 billion. The excess of TWD 1 billion is taxed at the same rate of 0.1% through declaration on a tax return. However, taxpayers have the option to include gains in the final tax return and pay 15% tax on the gains on an actual basis.
Beginning 2013, the gains on these shares are taxed at a rate of 15% on a genuine basis (included in the annual tax return). However, the shareholders holding long-term investment will receive certain tax incentives. However, there are no changes to taxation of unlisted shares, IPO shares and shares held by non-resident individuals.
Gains from share transfers derived by enterprises remain to be taxed at a rate of 12% under the Alternative Minimum Tax regime. Also losses can be carried forward for 5 years.
