The President promulgated Article 2-2 of the Statute for Securities Transaction Taxes (hereinafter, the “Statute”) as amended via the President-Hua-Zhong-One-Yi-10700047611 Directive of April 27, 2018 to extend the tax reduction measures to the end of 2021. Pursuant to Article 13 of the Central Regulation Standard Law, the effective date shall be the third day after promulgation. Therefore, the amended provisions came into effect on April 29.
According to the Ministry of Finance, the tax rate for the securities transaction taxes on day trading of spot securities was reduced to 1.5% for April 28, 2017 through April 27, 2018 in order to improve the liquidity of the stock market in Taiwan and stimulate the stock market. After the tax reduction measure was implemented, the volumes of day trading of spot stocks have increased and the liquidity of the stock market has been effectively enhanced. Both the trading volumes in the stock market and the securities transaction taxes on day trading of spot stocks have grown.
Therefore, since Taiwan’s economy is currently at the stage of mild recovery and the government is still reforming the tax regime and financial measures along with gradual recovery in the liquidity of the stock market, Article 2-2 of the Statute is amended this time to specifically extend the tax reduction measure to December 31, 2021 in consideration of three major aspects, namely, fairness of taxation, tax revenues and economic development. According to the Ministry of Finance, day trading in the stock market on April 30 (Monday) can be conducted seamlessly since April 29 was a Sunday when the stock market was not open for trading and taxes can be continuously levied at a rate of 0.15%. It is expected that the liquidity and trading volume level of the stock market in Taiwan can be maintained to effectively contribute to the prosperity of the market. Relevant forms and computer operating systems of the Ministry of Finance have been modified to ensure the smooth operation of the new system.