Securities transaction tax is one type of transaction taxes with respect to sale of the certain type of securities and has different nature from that of securities transaction income tax. Regardless of the gain or loss derived from trading of securities, the securities transaction tax shall be imposed based on the transaction amount. Securities transaction income tax is an income tax imposed on the gains derived from trading of securities. The meanings of these two types of taxes are different.
The trading of certain type of securities, except for bonds issued by the government of all levels and other tax-exempt securities, is subject to the securities transaction tax. The certain type of securities described above refers to bonds issued by the governments of all levels, shares issued by companies, corporate bonds, and other securities offered to the public with government approval.
Securities transaction tax shall be paid to the national treasury by securities dealers who sell their own securities. On the other hand, certain collection agents are responsible for withholding and paying the securities transaction tax to the treasury as follows:
| Type of transaction | Collection Agent |
|---|---|
| Trading of securities by underwriters approved by the competent authority to handle offering of new shares, underwriting and distribution of the shares on behalf of issuers | Underwriter |
| The trading of securities by securities brokers approved by the competent authority to engage in securities trading in the shares exchanges on behalf of customers | Broker-dealer |
| Trading of securities by the transferor to the transferee directly | Transferee |
| Type | Tax Rate (based on the trading price) |
|---|---|
| Shares and share certificates stating the rights of the shares issued by companies | 1. 0.3 %. 2. 0.15 % of listed or OTC-listed stocks with respect to the day trading until December 31, 2024. 3. 0.1 % of call(put) warrants issuers selling stocks from the warrant hedging account based on quotation obligation and risk management purpose,with daily transaction amounts falling within the necessary hedging range from November 10, 2023 to November 9, 2028. |
| Corporate bonds and financial bonds | 0.1% of transaction amount; however, according to Article 2-1 of the Securities Transaction Tax Act, the securities transaction tax is suspended during the period from January 1, 2010 to December 31, 2026. |
| Other securities approved by the government | 1. 0.1 % (eg. Taiwan depository receipt, beneficiary certificate, and call / put warrant) 2. Levy on securities transaction tax on the beneficial certificates of listed exchange-traded funds mainly invested in bonds shall be suspended during the period from January 1, 2017 to December 31, 2026. |
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