Taiwan’s stocks climbed from a 10- week low after a government panel outlined two options for investors to assess their taxable income under a possible capital gains tax on stock trades, which eased concerns over how the levy would be calculated.
The first option would be for investors to prove the actual price they paid for the securities, according to a statement posted on the ministry’s website yesterday after the tax- overhaul panel met for a second time. The alternative is for the government to pick a specific day as the basis for stock prices to determine investors’ profit. The ministry said it will submit a proposal to the Cabinet in two days to tax any capital gains made from next year on stock transactions.
The benchmark Taiex Index (TWSE) closed 0.5 percent higher in T139" class="menu-item menu-item-type-custom menu-i February 1 yesterday after slumping 5.4 percent since the Economic Daily News reported on March 29 that the government was evaluating the levy. Foreign investors were net sellers of Taiwanese stocks in five out of the last seven trading days.
“There’s more certainty on how to identify investors’ stock income,” Sam Hsieh, a Taipei-based fund manager at Fuh Hwa Securities Investment Trust Co., who helps oversee the equivalent of $7.8 billion, said by phone today. “Previously, there was a lot of selling pressure because investors were scared they may be taxed a lot based on other possible models.”