Scenario: an investor sells all shares of its Taiwanese subsidiary for USD 10 million at a USD 1 million gain. Accounting taxes the 1 million gain — but the actual tax bill is higher because of a levy on the full 10 million price. What is it?
Taiwan: 0.3% securities transaction tax — on the price, not the gain
Taiwan levies 0.3% securities transaction tax on the share transfer price (commonly published rates — verify with local counsel). On a USD 10 million deal: 0.3% × 10 million = USD 30,000 — payable even if the gain is only 1 million or even at a loss. This is the “hidden tax” that gain-focused accounting misses. Plus: exiting Taiwan is tied to investment approval — MOEAIC at entry, the central bank (CBC) at exit; the original approval file must be complete for money to leave.
Vietnam: 0.1% on price for individuals, 20% on gains for organizations
Enterprise Law 59/2020/QH14 (Articles 68/112, buyback under Article 134): reduction by resolution plus change registration, no investment-approval layer like Taiwan. Capital transfer: individuals transferring securities pay 0.1% on the transfer price — the same mechanism as Taiwan’s securities transaction tax but 3 times cheaper (0.1% vs 0.3%); organizations pay 20% on the gain. Withdrawn cash moves through the ICA.
The real comparison: 0.3% vs 0.1% — and who the seller is
If the seller is an individual: Taiwan 0.3% on price vs Vietnam 0.1% on price — Vietnam 3× cheaper, a USD 20,000 gap on a 10 million deal. If the seller is an organization: Taiwan 0.3% on price + gains tax (under Taiwan CIT law) vs Vietnam 20% on gains — place against the profit margin: thin margins make Taiwan’s 0.3%-on-price more painful; fat margins make Vietnam’s 20%-on-gain heavier. And do not forget time cost: exiting Taiwan still passes the MOEAIC/CBC gate — a missing root file traps cash, while Vietnam only needs tax finalization done.
Bottom line for decision-makers
For Taiwan: add the 0.3% securities transaction tax into every sale-price model (buyer/seller agree who bears it); dig up the MOEAIC approval file before signing the transfer agreement. For Vietnam: identify whether the seller is an individual or organization for the correct 0.1%/20%. The rule: tax on price shows no mercy to loss deals — the biggest difference from tax on gains.
Frequently Asked Questions
What is Taiwan’s securities transaction tax?
0.3% on the share transfer price (commonly published rates) — payable even on break-even or loss sales; verify details with local counsel.
What do individuals pay on share sales in Vietnam?
0.1% on the transfer price (securities) — the same mechanism as Taiwan’s but 3× cheaper (0.1% vs 0.3%).
Is exiting Taiwan subject to approvals?
Yes. Exit is tied to investment approval: MOEAIC at entry, the central bank (CBC) at exit — the original approval file must be complete.
Why is tax on price more dangerous than tax on gains?
Because it spares no loss deal: losses still attract 0.3% (Taiwan) / 0.1% (Vietnam individuals) on the full transfer price.
This article has been quality-reviewed by the FLAW AI Legal Council