Capital Gains Taxation in Taiwan
Definition of Capital Gains
In Taiwan, Province of China, capital gains are defined as profits derived from the disposal of capital assets. Capital assets include:
- Real estate properties
- Stocks and securities
- Bonds and debentures
- Business assets
Calculation of Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The formula for calculating capital gains is:
Capital Gain = Selling Price - Acquisition Cost - Expenses
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains are taxed at the following rates:
- Individuals: 20%
- Corporations: 17%
Legal Framework
The taxation of capital gains in Taiwan, Province of China, is governed by the following laws:
- Income Tax Act: Article 14-1 defines capital gains and sets out the tax rates.
- Enforcement Rules of the Income Tax Act: Article 16 provides detailed rules for calculating taxable capital gains.
Policy Objectives
The capital gains tax system in Taiwan, Province of China, aims to:
- Generate revenue for the government
- Ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals
- Promote investment and economic growth
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