On 1 October 2026, the Executive Yuan (Cabinet) passed the draft amendment to Article 2-1 of the Securities Transaction Tax Act during its weekly plenary session. The amendment proposes to adjust the securities transaction tax (STT) rate structure for day trading of stocks and exchange-traded funds (ETFs). Currently, day trading benefits from a reduced tax rate of 0.15% (versus the standard 0.3% for non-day trades). The draft amendment seeks to further reduce the day trading rate to 0.1% for a trial period of three years to enhance market liquidity and align with international competitive standards. The amendment also includes a sunset clause requiring legislative review before expiration. The bill will now be forwarded to the Legislative Yuan for deliberation and voting. If enacted, the new rate would take effect on 1 January 2027. The Taxation Administration estimated the rate reduction would decrease annual STT revenue by approximately NT$15 billion but projected increased trading volume to partially offset the loss. Market participants, including securities firms and institutional investors, are advised to monitor the legislative timeline and prepare system updates for the potential rate change.
Key Takeaways
- Rate Reduction Proposal: Day trading STT rate to drop from 0.15% to 0.1% for a three-year trial period starting 1 January 2027.
- Legislative Process: The amendment requires Legislative Yuan approval; the timeline for passage is uncertain but likely before year-end 2026.
- Market Impact: Lower transaction costs may boost high-frequency trading and overall market turnover, affecting brokerage revenue models and tax receipts.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement