Under the Securities Transaction Tax Act, securities transaction tax shall be imposed on securities exchange transactions. Securities are defined as follows:
1. Shares or share certificates issued by companies (The companies specified in this section are those by definition of
ROC Company Act);
2. Corporate bonds;
3. Any other securities offered publicly after approval by the government; and
4. Government bonds.
The seller of securities pays the transaction tax. To facilitate the process, the tax is collected on the day of the transaction date by a tax collecting agent on the seller’s behalf. Collecting agents are defined as underwriters, brokers, or transferees for direct transactions.
Securities taxes are levied on the amount of each transaction based on the following rates:
Securities Tax Rate
Shares, certificates attesting ownership 0.3% of securities transaction price.
Corporate bonds and other securities approved by the
government 0.1% of securities transaction price.
Exemptions are allowed for:
1. Exchange of government bonds.
2. All new shares issued by a new company or by a company in connection with a capital increase.
3. All corporate bonds initially issued and offered to the public which have been duly approved by the competent authority.
4. All securities acquired by inheritance or donation.
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