The Ministry of Finance is considering to levy a capital-gains tax on institutional and corporate investors on their stock investments as part of the ministry's plan to impose a minimum tax on companies.
"We are not reviving taxation on yields from stock investment," Minister of Finance Lin Chuan (林全) said at a press conference yesterday.
The proposal won't apply to individuals, Lin said, adding that a final decision on including stock profits as taxable income hasn't been made yet.
"We are thinking about including the profits obtained from stock investment in the proposed minimum tax scheme," Lin said.
Some Taiwanese companies, particularly technology companies, don't pay any income taxes because of tax breaks the government offers to encourage investment. The government has been under pressure from lawmakers to impose a minimum tax on firms amid forecasts that the budget deficit will widen to a record NT$337.3 billion this year from an estimated NT$304 billion last year.
In March the minister said the government may require companies to pay a minimum 10 percent tax on profits. Yesterday Lin said the proposed measure "would affect a few hundred companies."
While the government is looking for ways to increase tariff revenues and pare its record budget deficit, Lin downplayed the potential impact on institutional investors. He said that the chance to be taxed for stock investment profits is slim if this kind of yields makes up less than half of the total income institutional investors make here.
For instance, if a securities house has an annual income of NT$2 million, including NT$1 million stock investment profits and the rest from non-stock investment income, the securities house would have to pay NT$250,000 in business tax for its non-stock-investment income according to current tax law, Lin said.
If the minimum tax rate is to be set at 10 percent in the future, the NT$250,000 tax can be converted into a tax rate of 12.5 percent, which exceeds the minimum tax rate imposed.
The securities house, therefore, need not pay tax on its stock investment profits, he explained.
The ministry is also considering whether to exclude foreign institutional investors' stock trading profits when imposing the minimum tax rate, Lin said.
"We wouldn't want to discourage foreign investors from investing in Taiwan," he said.
As most foreign institutional investors set up small offices in Taiwan, they may not be subject to the tax proposal, he added.
Moreover, Lin said that the proposal isn't a revival of the proposed capital-gains tax on stock profits, which was scrapped in 1989 after it triggered a 19-day plunge in the benchmark TAIEX.
The ministry plans to submit the minimum tax proposal to the Cabinet next month, Lin said.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to