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.
When starting a business in Taiwan, one of the first legal decisions entrepreneurs face is whether to establish a “company” or register as a “sole proprietorship”. Many entrepreneurs tend to confuse the two; however, under Taiwan’s dual regulatory framework governed by the Company Act and Business Registration Act, these entities differ fundamentally in terms of legal personality.
In Taiwan, every company is required to have a registered business at the time of incorporation, commonly referred to as the company’s registered office. Many people assume that the registered office is the same as the place where the company conducts business operations and opens for daily business activities.
Under Taiwan’s current regulations, foreign nationals are generally required to obtain a work permit before engaging in any employment in Taiwan. In other words, a work permit must be applied for and approved by the competent authority before a foreign national may lawfully work in Taiwan. As a general rule, employment is not permitted prior to the approval of the work permit.
As the global transition toward clean energy accelerates, Taiwan is also moving quickly to expand its renewable energy capacity. Offshore wind, hydrogen development and solar projects have attracted international developers and engineering firms to establish project teams and technical hubs locally.
