Minister of Finance Chang Sheng-ford (張盛和) yesterday said the ministry has reached a general consensus with the Ministry of Economic Affairs (MOEA) to postpone taxing employee stock bonuses.
However, the two ministries still have more to discuss regarding the maximum limit of stock bonuses eligible for the postponement before sending the proposal to the legislature later this year, with the aim of adopting the new measure next year at the earliest.
Minister of Economic Affairs Woody Duh (杜紫軍) first raised the idea in an interview with the Chinese-language Commercial Times last month, as the MOEA is looking to help companies increase incentives to retain talent through the initiative.
“Boosting wages and benefits is the most important factor to holding onto outstanding employees, with stock bonuses one of the benefits,” Chang told a media briefing yesterday.
Chang said the two ministries have agreed to postpone the imposition of income taxes on stock bonuses by five years, with the new measure applicable to all bonuses distributed — whether they are to a chief executive officer or a lower-level employee.
However, the two ministries have different opinions on the maximum amount of stock bonuses an employee can have before the postponement no longer applies to them, with the Ministry of Finance likely to set the limit at NT$3 million (US$100,000) while the MOEA is looking for a higher ceiling, Chang added.
Delaying the imposition of income taxes on stock bonuses would not lower the nation’s tax revenue, but only postpone the timing for the finance ministry to receive the funds, with employees who receive the bonus stocks able to keep the tax revenue they were supposed to pay for a longer time — to earn higher interests or other profits.
As for adopting a separate taxation system for capital gains on property transactions, the finance ministry is set to offer some privileged measures in tax exemptions or tax rates to people who sell a property to buy another one, or who only own one house, with a wealth-exclusion clause to be added, Chang said.
The wealth-exclusion clause may prevent people who own luxury properties from using the privileged measures.
The finance ministry is to define luxury property by price, with the minimum limit set between NT$30 million and NT$50 million.