Sat, Jul 26, 2014 - Page 13 News List

Ministry says consensus reached on capital gains tax

By Amy Su  /  Staff reporter

The Ministry of Finance (MOF) has reached some consensuses with taxation experts on a new capital gains surcharge for property transactions, with plans to send a draft proposal to the legislature next year.

BASIC AGREEMENT

“All participants basically agreed with the proposal to impose a capital gains surcharge on property transactions involving both homes and land,” Minister of Finance Chang Sheng-ford (張盛和) told a media briefing on Thursday after a conference attended by 10 taxation experts from academia.

The consensuses includes taxes on transactions of properties held for a long time, as well as on self-use homes and farmhouses, Chang said.

To impose the planned tax, the ministry is to devise a formula to calculate the value of homes for sale, unless property owners can provide evidences of how much they paid for their properties, Chang added.

Experts also supported the ministry’s view that the levy on land value increment taxes should be maintained, with the tax amount allowed to be deducted from the declaration amount of consolidated income tax, according to Chang.

However, Chang said that ministry and taxation experts have not yet reached a conclusion on how to tax the capital gains on property transactions, with some supporting the view that a separate taxation system should be adopted, while others advocate its combination into the consolidated income tax.

Whether the luxury tax — also known as the special sales tax on selected goods and services — should be abolished after the implementation of the new measure remained an issue, Chang said, adding that lowering the tax rate may also be an option.

To gain more input from the public, the ministry is scheduled to hold another conference next month, that is to be attended by professionals from private groups and industry.

Chang said the ministry would do its best to follow the original plan to send the draft proposal to the legislature in the first legislative session next year, but added that the reform was an important and unprecedented plan that would be launched with caution.

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