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As securities trading gain falls under capital gain, based on a fair taxation principle, taxing capital gain has gradually emerged as a consensus among world countries. The thesis first attempts to examine the taxation principle in the levy of taxes, and the theories behind taxing capital gain, and to sort out the timeline and relevant legal guideline pertaining to the levying or suspending of the securities trading income tax in Taiwan, and understand regulations about the levy of securities trading gain tax in world countries, intended as references for Taiwan’s drafting and promulgating securities trading income tax policy in the future.
The thesis then moves to analyze disputes in taxation levying arisen from the suspension of the securities trading income tax levying in conjunction with relevant interpretation ordinances, including disputes surrounding income derived from the liquidation of marketable securities, cost and expenditure reconciliatory principle, taxing of interest in bond transactions, as well as disputes pertaining to circumventing the tax burden through the suspended securities trading income tax, all of which are beckoning for in-depth examination, before the thesis moves on to conclude a comprehensive overview in recapping the core issues surrounding various disputed subjects and some of the deficiency in the current laws, together with tangible recommendations and direction of improvements presented.
Furthermore, of the foresaid taxation disputes, as the interpretations from tax collection agency and the administrative court have all been backed by excerpted substance over form doctrine as the basis of tax levying, the thesis moves to continue examining the significance, substance and importance of substance over form doctrine, and analyzing some of the cautions and overall recapitulation when the tax collection agency is implementing substance over form doctrine.
Lastly, the thesis reckons the levying of the securities trading income tax as,
-Befitting government fiscal revenue and the fair taxation principle.
-That in terms of the validation data, the market’s trading scenarios are less prone to any ominous shift or decline following the levy of the securities trading income tax.
-That following the suspension on the levying of the securities trading income tax, which presents a tax free margin to the taxpayers to seek various tax-sheltering planning that may poise to disrupt the taxation system, the litigation cases arisen as a result of which may cost the tax collection agency and the taxpayer an enormous sum of litigating costs.
That the levying of the securities trading income tax helps to resolve the issue of taxing employee share bonus granting, the issue of taxing technical share granting, the issue of taxing employee share pledging, and the issue of taxing by the prevailing share cost, hence making it justifiable that the tax levying shall be resumed. In addition, the promulgation and amendment of relevant taxation laws and interpretation ordinances need to be timely and concise, in that any deficiency in the legal stipulations or relevant laws and regulations should call for immediate and voluntary review in order to curb tax revenue loss and to help maintain a rational taxation scheme, a swell as ensuring that the tax collection agency be able to uphold the very essence of a fair taxation levying.
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