Surf Taiwan News, Browse the World »
Major companies not concerned by planned dividend tax credit cuts
Central News Agency
2014-02-24 11:27 PM
Taipei, Feb. 24 (CNA) Several listed companies said Monday that their dividend policy will remain unchanged after the Ministry of Finance announced that it may cut the tax credit given to individual shareholders on their dividend income by up to 50 percent.

Taiwan Semiconductor Manufacturing Co. said that it respected the government's tax reform proposal and that its dividend policy would not change even if the adjustment were made.

United Microelectronics Corp. said that although shareholders may have to pay higher taxes or claim lower tax refunds, its dividend policy will not change. The Formosa Plastics Group said the group benefits from investment tax credits and does not have a high tax burden, so the measure would not affect it too much. But the group said the measure could affect smaller shareholders and enterprises with higher income tax rates. Under Taiwan's current tax law, individual taxpayers who report dividend income get a tax credit based on an estimated value of the taxes that companies pay on their earnings. This "imputed" value is usually calculated according to the 17 percent corporate income tax rate. The tax credit can be used by taxpayers to offset taxes owed on other income or, for taxpayers with little other income, to claim a tax refund. If that tax credit is cut in half, people with dividend income will see their tax burdens rise, and investment consulting companies described the proposed cut as tantamount to punishing long-term investors. They feared that it could lead to the exodus of middle-class individual investors. Lee Chin-tu, a senior stock investor, said the cut could affect investment willingness and result in shrinking transaction volumes. (By Jackson Chang, Wei Shu, Esme Jiang and Lilian Wu)

HOME |  WORLD |  Politics |  Business |  Sports |  Lifestyle |  TAIWAN |  Technology |  Health |  SUPPLEMENT |  Society |  OPINION
  • Taiwan News  ©  2014 All Rights Reserved.