Taiwan Securities Transaction Tax (STT)

On 10 May 2023, the draft amendment of the STT Act proposed by Taiwan’s Ministry of Finance (MOF) on 2 March 2022 was approved and released by the President Office. The objective of this amendment was to reduce tax burden on hedging compliance transactions and to promote warrant trading volume. The MOF has indicated that the amendment will improve the current market making and liquidity of warrants, ultimately creating a more favourable investment environment. Key updates are summarised as follows:

1. Within the next five years after the amendment has become effective, the STT will levy on the sale of authorised stocks in warrant hedge accounts from the time the shares are listed or traded over the counter until their expiration date reduced from 0.3% to 0.1%, given that the stocks are sold for the purpose of fulfilling quotation responsibilities and risk management.
2. Further to the above, the collecting agent and the securities dealer are required to document transaction details of such warrant hedging transactions and file with the local tax authority by the fifth of the following month.

The effective date of the above amendment is 10 November 2023.

For further information, please contact Cheli Liaw.