Several types of shares without certificate, but registration in TDCC (Taiwan Depository & Clearing Corporation), are still deemed as legal issued shares. Such shares are solely levied on transfer tax. However, other types of transacted stocks without certificate are deemed as property transactions. Such transaction is not levied on transfer tax, but levied higher on individual income tax.
Here is a similar case occurred recently. A company which original capital is 6 million in TWD. After years gone by, the company is quite reputational and successful, but the founder is too elder to manage this company and decide to transfer his company by stocks in 14 million in TWD to others. Nevertheless, the issued stocks were not certificated by banks, neglectful of the article 162 in “Company Act”, which means it is not a legal stocks transaction, despite of the success of this transfer. The nature of this transaction is attributed to “contribution of capital”, instead of stocks. The founder not only paid the transfer tax mistakenly, but also failed to declare it in the individual income tax, resulting in being fined up to 3.6 million in TWD for the recovery of overdue tax.
In the course of communication, the founder took the other friend as instance. The friend transferred her stocks without certificate through the book-entry system either, but only had to pay the transfer tax, without the individual income tax, which is very confusing to the founder.
In fact, the stocks of the friend are without certificate indeed, but the issued stocks are reversely registered in TDCC, fully complying with article 161-2 in Company Act. Therefore, the entire procedure of issuance is finished legally. Even if such stocks are not made physically, the stocks still can be defined as legal securities. According to “Security Transaction Tax Act”, all transaction of valued securities shall be imposed with the security transaction tax, but no individual income tax incurring currently.
Kind reminder from Kaizenthat from start of January 1st this year, the income from transaction of securities in stocks without listing or registration in emerging stocks is no longer exempted the tax fully. Based on article 12 in “Income Basic Tax Act”, such transaction shall be calculated into individual basic income tax to declare jointly.
Disclaimer
All information in this article is only for the purpose of information sharing, instead of professional suggestion. Kaizen will not assume any responsibility for loss or damage.
Transferring a house to children through a gift allows the use of the announced current value to calculate the gift amount, and there is a tax exemption available to save on taxes. However, if children sell the house later, they will face a huge unified real estate tax because the profit is calculated based on the announced current value at the time of the gift
Limited company by shares in Taiwan holds an annual regular meeting of shareholders every year. If there are significant matters to be discussed, an extraordinary general meeting of shareholders may also be convened. Generally, both regular meeting and special meeting are convened by the board of directors.
According to the regulations of Company Law in Taiwan, the term of office for director and supervisor of a Taiwanese corporation is maximum of three years, and elections must be held at the end of each term. However, if the directors and supervisors elected in each election are the same as the previous one, they may be re-elected consecutively.
Hong Kong, Macao and Taiwan residents who have lived in the inland (mainland) China for more than six months with a legitimate and stable job, a legitimate and stable residence or continuous school attendance are eligible to apply for a residence permit in accordance with the relevant regulations according to their wishes.