Major Reduction in Futures Transaction Tax Rates

        President Chen Shui-bian promulgated a reduction in rates of taxes on futures transactions on Dec. 14, 2005. The tax rate for stock index futures contracts has been slashed by 60%, cutting the rate from the current 0.25-1.5% to 0.1-0.6%. For the tax on options transactions the reduction is 20%, resulting in a minimum rate of 1% and a maximum rate of 6%.

　　Besides lowering the tax rate on stock price and options contracts, the revision also adds regulations for interest rate and other futures contracts. The tax rate on interest-rate futures is set at 0.125-2.5 millionths of the contract volume; for contracts on metals and other futures, the rate is set at 0.125-0.6 millionths. The actual rate will be determined by the Ministry of Finance depending on the type of contract, and reported to the Executive Yuan for approval.

　　The Financial Supervisory Commission notes that besides bringing consistency to taxes levied on transactions in futures products, the revision also facilitates the expansion of the scale of Taiwan’s futures market, the attraction of participation by foreign institutional investors, and the reinforcement of Taiwan’s international competitiveness. For further details, please visit this website: http://gazette.nat.gov.tw/EG_FileManager/eguploadpub/eg011240/ch09/typea/gov80/num2/Eg.htm.

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