Can somebody tell me if this is still the status quo?
e.g. buy and sell stock and no tax on gains in Taiwan.
Germany has a big 25% tax (+5,5% extra solidarity tax for east Germany) on this which I can get back when I can prove that I live overseas.
According to my coworkers there is a tax free amount of 6 million TWD. I take it with a grain of salt.
I found some info on TWSE website:
http://www.twse.com.tw/en/page/products/trading_rules/costs.html
But this is only for Taiwan Stock Exchange.
Iirc 6m refers to the Income Basic Tax Act.
As for the Income Tax Act, there is an exemption for income from investment (including interest on bank deposits), but it’s lower than that.
Personal taxation:
Income tax on gains derived from the sale of shares has been abolished.
Dividends → Taxable Income
The big tax hit is on dividends (well, relatively big), which is why people always sell their stocks right before dividends are distributed.
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edit – I see you found that Deloitte report. No tax by Taiwan govt on capital gains for individuals on stock sales. Yes tax on dividends.
Isn’t this illogical? Whenever ‘people’ sell a stock, another buys it.
There’s usually a large enough sell off right before distribution that the price goes down, after which they buy it back again at a lower price. This way they avoid the dividend tax and also make a bit of capital gain at the same time. At least, that’s the calculation they make. The people on the other side of the sale are obviously making a different calculation.
I’m not trying to be argumentative but I could make the statement; ‘people always BUY their stocks right before dividends are distributed’. Given the irrefutable fact that for every seller there is a buyer. Many people are looking for yield (income), and in order to ‘avoid the dividend tax’ they must also ‘avoid the cash dividend’.
There are plenty of people who buy stock before dividends even though there is no point. The dividends are ‘taken off’ the stock value.
There is ‘a point’ if/when the stock price quickly recovers to its pre ex-dividend price, which can often happen. I think it’s unwise to make generalizations about something as unpredictable as the TAIEX.