Sat, Apr 07, 2012 - Page 12 News List

Tax panel spares foreign institutional investors

CLEARING THE AIR:The move cleared up a major area of uncertainty as foreign investors would be exempt from a planned capital gains tax levied on securities investments

By Amy Su and Shih Hsiu-chuan  /  Staff reporters

Foreign institutional investors (FINI) would be exempt from a planned capital gains tax on stock investments, the Ministry of Finance said in a press release on Wednesday night.

The move came after the first meeting of a ministry-based task force and represents the first, and arguably one of the most important, regarding the possible tax.

“The concept is in line with the securities income taxation systems currently used in other major countries,” Minister of Finance Christina Liu (劉憶如) said in the statement.

A FINI is defined as an institutional investor from or registered in a country outside of Taiwan and without a fixed place of business or a business agent in Taiwan, the statement said, listing the California State Teachers’ Retirement Fund as an example.

Adhering to an ability-to-pay principle, Liu said the task force would focus on maintaining reasonable implementation costs, softening the move’s impact on the stock market and ensuring stable tax revenue.

The ministry will hold two meetings next week to listen to different views on the issues, with several famous individual stock investors and analysts, such as Lai Sian-jheng (賴憲政), invited to speak at the meeting, Liu said.

Separately, Premier Sean Chen (陳冲) yesterday said that investor confidence would be restored as the tax proposal gradually takes shape and uncertainties are removed.

Uncertainties have harmed the stock market recently, but when the task force outlines a clear direction for tax reform and gradually comes to a consensus, the stock market will stabilize, Chen said.

The task force had not reached a conclusion on whether individual investors would be exempt, Liu said when she was asked by Chinese Nationalist Party (KMT) Legislator Alex Tsai (蔡正元).

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