Stamp Tax
About the Stamp Tax Stamp tax-saving tips II. Tax Rate and Taxpayers III. Methods of Stamp Tax Payments Part 2 Stamp Tax-saving Tips II. The following items fall within the scope of stamp tax, but are exempt from the stamp tax levying according to the Stamp Tax Law. III.The following items, despite being monetary receipts, are exempt from stamp tax. IV. How to legally reduce or be exempt from taxable stamp tax, thereby reducing the tax burden. V . Monetary receipts: Ask to be paid by a bank check, postal check, or a cashier's check. Have the name of the issuer and check number indicated on the receipt for it to be exempt from stamp tax. VI. Contract agreements:
The stamp tax, intended as a documentation tax, is applied to all types of documentations (receipts of monetary payments, deeds for sale of movables, contracting agreements, and deeds or contracts for sale of real estate, etc.) issued within the jurisdiction of the Republic of China. Since there are many types of document and not every type of documentation requires the tax stamps, the tax law does offer the items currently subject to the levy of the stamp tax. Besides the normal procedure of affixing the tax stamp, in cases where the tax payable is large, a tax payer may use the method of "Affixation of tax payment receipts", or a simplified payment procedure" Collective payment method" may be used in cases of a great number of documentations. Given that most individuals, businesses and organizations are less familiar with stamp tax, a few tax-saving tips are provided to help you.
Part 1 Stamp Tax Levy
I. Tax Scope
Referring to receipts, slip, release, bank book, payment record and the like issued to identify monetary payments.
Referring to deeds receipt issued for sale of movables.
Referring to agreements executed for the completion of a specifically ordered work or task, e.g., construction contracts, printing contracts, OEM contracts and the like.
Referring to deeds or contracts for sale, gratuitous transfer, partition or exchange of real estate or pledge of lien on real estate to be submitted to government agencies for registration.
Affix tax stamp at 0.4% of the amount received, with the exception of 0.1% for money deposited by bidders.
Taxpayers---A person who executes monetary receipts.
Affix tax stamps at NT$12 per piece.
Taxpayers---A person who executes the contracts for the sale of movable
Affix tax stamps at 0.1% of the contract price.
Taxpayers---A person who executes contracting agreements.
Affix tax stamps at 0.1% of the contract price or value of the real estate.
Taxpayers---A person who executes contracts or deeds for sale, gratuitous transfer, partition or exchange of real estate or pledge of lien.
Tax stamps are available in nine denominations of NT$1, $3, $4, $5, $10, $20, $50, $100 and $200. Taxpayers may purchase tax stamps at government-designated offices such as: branches of cooperative bank, post office, farmers association, credit union and some of the commercial banks. Taxpayers may affix them on the contracts, deeds, receipts or documents executed, and after affixation the edges of the stamps should be chopped in order to cancel them. Such chops may be replaced by personal signature.
(1) Requesting a larger denomination of tax stamps:
Affixation of tax payment receipts: In case the tax payable is so large that the method provided in the preceding paragraph is impractical, a taxpayer may apply to the local tax authority for issuing a tax payment notice and pay the stamp tax to designated financial institutions, then affix the payment receipt to the taxable documents.
(2) Collective payment method:
A simplified payment procedure may be used in cases where a great number of contracts, deeds or receipts are executed by any publicly-owned or private enterprise in its everyday business. The stamp taxes incurred thereon within every two months may, upon the approval of the competent authority, be paid by submission of a collective tax return within the first 15 days after the two-month period, in which case affixation of tax stamps is waived.
I. The following 4 types of deeds, which fall outside of monetary receipts; contracts or deeds for sale, gratuitous transfer, partition or exchange of real estate or pledge of lien, are excluded from the stamp tax levy.
--Suppose A Company and B Elevator Company together sign a five million NT dollar contract for elevator purchasing and installing. The elevator costs four million NT dollars and the installation fee is one million NT dollars. In this case the entire contract will be subject to 0.1% stamp tax. Since this is all in one contract both A company and B elevator company will have to pay a total of NT$5000 stamp tax. But, if the contract is broken down to four million for the elevator and one million for installation, the tax due will now be reduced to NT$12 (for contracts on sale of movables) and NT$1,000 (for the contract price or value of the real estate which is 0.1%) a total saving of NT$3,988 on stamp tax alone.