Financial Association Recommends Extending Day-Trade Tax Reduction for 10 Years and Restarting Offshore Funds Repatriation Act to Attract Capital Back to Taiwan

The Financial Association has released its mid-year report on this year's Financial Policy White Paper, recommending that the preferential securities transaction tax rate of 0.15% for day trading of listed and OTC spot stocks be extended for another 10 years beyond its expiration date, lasting until the end of 2037. To attract offshore capital back to Taiwan and achieve the policy goal of becoming an Asian asset center, the report recommends restarting the 'Offshore Funds Repatriation Act 2.0' with more attractive tax incentives.

The Financial Association stated that after the mid-year review meeting, proposing organizations will assess whether to revise, adjust, or withdraw their proposals based on discussions, before submitting them to the final review meeting, scheduled to be held by early September.

The 2026 Financial Policy White Paper mid-year report covers five major areas: enhancing financial resilience and risk supervision, promoting healthy financial market development and business innovation, advancing fintech development and innovative applications, implementing sustainable finance and promoting social welfare. It includes a total of 31 recommendations.

The current preferential tax treatment for day trading is set to expire at the end of next year. The report recommends amending Article 2-2 of the Securities Transaction Tax Act to extend the 0.15% tax rate for day trading of listed and OTC spot stocks for another 10 years, effective until December 31, 2037.

Additionally, the report recommends reducing the business tax rate applicable to core income from banking and insurance operations in the financial sector from the current 5% to 2%, so that all core financial income—except reinsurance income in the insurance sector—will be subject to a 2% business tax.

The 'Act for the Management, Utilization, and Taxation of Repatriated Offshore Funds' (Overseas Funds Act) took effect on August 15, 2019, and expired two years later. The report suggests restarting the 'Offshore Funds Repatriation Act 2.0' to attract capital back to Taiwan and achieve the policy objective of becoming an Asian asset hub. It recommends adjusting the 2.0 version based on past implementation outcomes and policy goals to offer more favorable tax incentives.

The report notes that premiums from foreign currency insurance policies have been growing steadily and urges the Financial Information Corporation (FISC) to establish a nationwide 'foreign currency' payment platform or enable the National Payment Network (e-Bill) to accept foreign currency payments for foreign currency products, supporting a unified fee collection mechanism for foreign currency insurance policies and cross-institutional foreign currency deductions.

Furthermore, the report recommends amending regulations governing the use of funds such as the Labor Retirement Fund, Labor Insurance Fund, and Public Servants’ Retirement and Pension Fund managed by government agencies, explicitly permitting investments in private equity funds established or managed by domestic asset management firms. It also recommends revising the Labor Pension Act to establish a co-existing public and private self-directed investment mechanism for workers.

Regarding the widely discussed issue of stablecoins, the report points out that Taiwan's policies have primarily focused on custodial service openings and regulatory oversight of stablecoin issuers, while mechanisms for stablecoin circulation and payment settlement in the real economy remain underdeveloped. To address businesses’ increasingly urgent needs for stablecoin receipts and payments, the report recommends early pilot programs for stablecoin applications to support the future formulation of relevant regulations.