| dc.description.abstract | Before the Income Tax Law was amended in 2007, there existed some controversial issues for the following issues: previous trader taxes, Outright Trading Method Financing Method and Amortizations. All these problems are related to the interest income tax treatment of the bonds. The new tax law has adopted separate taxation for the individual interest income of the bonds and combined taxation for the corporation, respectively. It also provides the tax payers the privilege of withholding taxes for previous traders. In addition, the new law includes No. 34 bulletin’s effective tax rate concept and considers the practical accounting of amortization, and in effect, found the solutions for all the recurring tax-imposing problems and controversies from the old days.
After the new law has taken effect, the National Tax Administration will successfully receive all of the revenues and decrease the uncertainty of tax rate. The debit market will go through a period of stable development. However, for the tax payers, there are both advantages and disadvantages. The biggest change will be funds that transact RP for individuals and trusts but do not distribute incomes. after deducting 10% of trading interest with certain conditions, whose net benefit will be as low as the 90% of that of the old law. In the meantime, to the bond merchants of transacting in RP, their tax cost will be transformed into the differences between the taxation based on coupon interest rate and the taxation based on RP interest rate. Moreover, there is no tax waiving during the RP period. As such, it would be necessary to set up the coupon interest rate when holding bonds as an important criterion for reference. In the meantime, the funding resources have to be developed diversely. Moreover, when considering amortization and turning to adopt the effective interest rate to calculate the taxation cost, the net benefit will be much increased than that in the old system. | en_US |