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REGULATIONS GOVERNING BUSINESS TAXES ON COMMISSIONS RECEIVED BY LOCAL SECURITIES FIRMS FOR TRADING FOREIGN SECURITIES
Ko-Jen Hsiang/Josephine Peng
In May, 2009, the Ministry of Finance introduced the following rules for levying business taxes on commissions received by local securities firms from investors for trading foreign securities by virtue of contracts authorizing local securities firms to pay foreign securities firms commissions on behalf of investors:
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A local securities firm trading foreign securities through a foreign securities firm on behalf of an investor shall pay a 2% business tax on the commissions it receives from the investor less the commissions it pays to the foreign securities firm on behalf of the investor.
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For the business tax on the commissions paid to the foreign securities firm, it shall be declared and paid by the local investor in accordance with Article 36 of the Business Tax Act. The local securities firm however may pay the business tax payable on behalf of the investor.
