Newsletter
SECURITIES TRANSACTION TAX PAYABLE ON OVERSEAS BONDS ISSUED BY ROC COM-PANIES
Article 1 of the statute for Securities Transaction Tax (SSTT) provides that securities transaction tax is payable on all trades in securities issued by ROC companies (government bonds are exempt). No distinction is made as to the nationalities of the buyer and seller or the place of trading.
In recent years, it has become common practice among ROC companies to raise capital by issu-ing company bonds overseas. Before issuing such bonds, they must apply to the Securities and Futures Commission (SFC) for approval. Under the SSTT, such overseas bonds fall into the category of other securities which may be pub-licly offered for sale with government approval. Therefore transactions are taxable at a rate of 0.1% of the traded price, to be collected and paid by the buyer at the time of trading.
Recently, the National Tax Administration of Taipei (NTAT) reiterated that regardless of whether one or both of the securities holder and assignee are ROC nationals or ROC business entities, whether they are resident, domiciled or have a place of business in the ROC, and whether the transfer is made within the ROC, in all cases the purchaser is responsible for payment of tax. The NTAT also specifically reminded interna-tional business branches of ROC financial insti-tutions which might purchase overseas-issued company bonds not to make the mistake of be-lieving they are not liable to pay securities transaction tax. If they have already failed to pay such tax, they should immediately declare and pay the amount outstanding, to avoid the risk of facing fines of 10 to 30 times the amount con-cerned in addition to the tax itself, if detected.