Taiwan Share Transfer Relevant Tax Certificates

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According to “Company Act” in Taiwan, the shareholders of company limited by shares remains the rights of share transfer as their own resolutions. It is not required to declare or change the registration of share transfer. Instead, the share transfer in company limited shall be approved by the majority of shareholders. Here are two points to be aware of:

  1. To proceed the change of ownership (This is company internal procedure.)
  2. Upon the transfer of shareholder registration, it is required to submit gift tax payment certificate issued by the competent authority, verified tax-exemption certificate, or exclusions from the total amount of gifts certificate.

 

After transferring, what kinds of taxation procedures for transferor (supposed the original shareholder is an individual) to face are?

 

First of all, we have to confirm the type of organization is company limited by shares or company limited. In the condition of company limited by shares, it is also necessary to confirm if the share certificate is issued or not.

 

For company limited, the spread occurred from the transfer will be deemed as individual property transaction income to combine with the individual income tax to calculate.

 

In the circumstance of the company limited by shares without issuing any share certificate, it is also deemed as individual property transaction income to combine with the individual income tax to calculate.

 

If the share certificate was issued, it is deemed as the securities transaction income. As the current Taiwan income tax regulations, it is not necessary to combine such income into individual income tax but pay the securities transaction tax,

 

However, in the condition that the company limited by shares is not a listed company but issued share certificates, it is still to list into individual income tax as the minimum tax to proceed tax return, even if the securities transaction income was suspended to impose.

 

For example, the shareholder A transferred TWD1,300,000 to his daughter B on 30/08/2019, but failed to submit the gift tax payment certificate issued by the competent authority. The company shall be faced the fine up to TWD15,000 in accordance with the articles 52nd in Gift Tax Act.

 

It is important for shareholders to bear in mind that the submission of gift tax payment certificates is required, regardless of the value of shares and tax exemption amount to avoid facing the related punishment.

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