Taiwan Legal Update: Securities Transaction Tax Levied on Foreign Government Bonds Suspended Until 2026 & Naturalization Process Simplified for Plum Blossom Card Holders

According to Ministry of Finance, in order to promote the competitiveness of Taiwan’s bond market, it is approved by the competent authority that publicly raise and issue foreign currency-denominated foreign government bonds in Taiwan’s stock market will be transaction-tax-free temporary, in accordance with Article 2-1(I) of Securities Transaction Tax Act, along with the suspension of securities transaction tax levied on corporate bonds and finance bonds.

Based on Article 2-1(I) of Securities Transaction Tax Act, to increase trading in the bond market, help enterprises raise money, and promote the operation of the capital markets, the securities transaction tax levied on corporate bonds and finance bonds shall be suspended during the period from January 1, 2010 to December 31, 2026. The Financial Supervision Commission(FSC), along with Taipei Exchange(TPEx), issued a notice on April 3 last year, which stipulated scope of the public offering or issuing of securities under Article 22 of Securities and Exchange Act, including foreign currency-denominated government bonds raised and issued in Taiwan and only sale to of professional investors by foreign issuers.

Since the nature of foreign currency-denominated government bonds is rather similar to that of corporate bonds and financial bonds, and in order to maintain the taxation equity, the government decided to suspend of its securities transaction tax, hoping to encourage foreign governments to issue international bonds to Taiwan and activate the bond market. It is believed that the policy will promote the development of the capital market, expand the scale and types of the island’s bond market, and increase the depth and breadth of our financial market, which in conjunction with the legislative purposes of Securities Transaction Tax Act Article 2-1(I).

Eventually, the Ministry of Finance has some further explaining to clarified the starting date for the new policy. To avoid disputes, the date of the announcement issued, January 24, 2019, was set as the commencement of foreign government bonds securities transaction tax suspension, which will be terminated by the end of 2026.

(https://www.ey.gov.tw/Page/AE5575EAA0A37D70/581446b1-c881-45df-9e11-c1b16ae16ee9)

For the sake of strengthening the recruitment of foreign professionals to stay in Taiwan, the Ministry of Interior(MOI) passed the draft amendment to Article 3 of “Standards for Defining High-Level Professionals for Naturalization” on the meeting held on January 24. In the future, holders of Alien Permanent Resident Card, also known as Plum Blossom Card, no longer required to hand incompetent authorities’ recommendation letter when applying for naturalization. It is reported that around 90 senior professionals holding Plum Blossom Card will be benefited from this policy right away.

MOI reasoned that the foreign senior professionals applying for the Plum Blossom Card were reviewed by the immigration departments after consulting the central competent authorities, and the application of naturalization for senior professionals is similar to review mechanism for applying for the Plum Blossom Card. Hence, the Ministry has relaxed the regulation by exempting those Plum Blossom Cardholders who intend to acquire R.O.C. nationality from providing recommendation letter written by the central competent authority and there is no need to send the application to ” Senior Professionals Immigration Review Committee ” for approval anymore.

The Ministry of the Interior pointed out that the amendment to Article 3 of the “Standards for Defining High-Level Professionals for Naturalization ” will be issued in accordance with the law in the near future. It is estimated that the simplification of the naturalization process for senior professionals as the alien permanent residents can shorten 4 to 5 months of application time.

(https://www.ey.gov.tw/Page/AE5575EAA0A37D70/35aaf633-d5de-49cf-8682-6a5f2c921ddf)

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