Cabinet approves bond, bond ETF tax exemptions extension for 10 years

• By Chung Li-hua / Staff reporter, with CNA

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The Cabinet yesterday approved a 10-year extension for securities transaction tax exemption for bond exchange-traded funds (ETFs), and corporate and financial bonds. It would also add active bond ETFs to the exemptions.

The Ministry of Finance said the securities transaction tax on bonds and passive bond ETF beneficiary certificates has been suspended since Jan. 1, 2010, and Jan. 1, 2017, respectively to boost the bond market, help companies raise funds and promote the development of the capital market.

The suspension of the securities transaction tax on corporate bonds, financial bonds and passive bond ETF beneficiary certificates was set to expire at the end of this year, it said.

A smartphone screen shows listed companies’ stock price data at a brokerage firm in Taipei on Sept. 18.

Photo: CNA

After reviewing the measure, the Financial Supervisory Commission determined that it has helped boost activity and development in the capital market, it added.

Given that active and passive bond ETFs have similar characteristics, the ministry said it decided the two should receive the same tax treatment, and proposed extending the measure to further promote the bond market and support the development of the capital market.

The suspension of the securities transaction tax on bonds and passive bond ETF beneficiary certificates would be extended for 10 years through Dec. 31, 2036, it said.

Beneficiary certificates of active bond ETFs would also be added to the tax exemption from Jan. 1 next year through Dec. 31, 2036.

The amendments to the Securities Transaction Tax Act (證券交易稅條例) have been designated as a priority bill, the ministry said, adding that it would work with the commission and legislative caucuses to complete the changes by the end of this year.

In related news, Taiwan ranked fifth globally in net financial assets per capita last year, averaging 164,470 euros (US$185,785.31), Allianz Research said in its Global Wealth Report.

Taiwan’s ranking remained unchanged from the previous year, trailing behind the US, Switzerland, Denmark and Singapore, the report showed.

Allianz assessed household assets and liabilities in nearly 60 countries, and found that global household wealth reached a record high last year, while the rise of artificial intelligence and market gains made asset ownership increasingly important in determining who benefits from wealth creation.

Global financial assets reached a record 268.4 trillion euros last year, up 8.6 percent from a year earlier, the report showed.

Total financial assets held by Taiwanese households rose 8.7 percent to 4.5 trillion euros at the end of last year, it showed.

The increase was slightly slower than the 9.3 percent growth recorded in 2024 and below the 9.8 percent average for other Asian markets covered in the report — excluding Japan and China — but it remained above the global average of 8.6 percent.

Securities in Taiwan recorded the strongest growth, surging 17.7 percent, compared with 4.9 percent growth in deposits and 2.4 percent in insurance and pension funds, the report showed.

Securities accounted for 34.9 percent of Taiwanese household financial assets, higher than the Asian average of 30.8 percent, but below the global average of 46.9 percent, according to the report.

Taiwan’s financial assets grew 6.9 percent in real terms last year, roughly in line with the 7 percent increase recorded in 2024, the report said.

Since 2019, Taiwan’s financial assets have increased by a cumulative 41.5 percent in real terms, slightly higher than the Asian average of 39.6 percent and significantly above the global average of 22.9 percent, it said.