Do You Have to Pay 230,000 NTD in Taxes After Selling Dividend Stocks? A Complete Guide to Taiwan's Stock Tax Rules — Which Is Better: Consolidated Taxation or 28% Separate Taxation?

Taiwan's stock market has experienced significant volatility this summer. At the end of July, the weighted index briefly dropped below the 40,000-point mark, but as of today (August 12), it has stabilized above the 45,000-point level. Recently, the market has frequently seen thousand-point swings, leaving investors on a rollercoaster ride.

Notably, Taiwan's new stock trading rules just took effect this past Monday, significantly shortening the "cooling-off" period for day traders. However, social media platforms have recently been circulating messages such as "sold 2 million NTD in dividend stocks and was notified by the tax authority to pay an additional 230,000 NTD in taxes." In response, the Taiwan Fact-Checking Center has released an investigation report.

How much tax do you actually pay when selling stocks? What kind of information is being shared online?

The report reveals that the posts are written in the first person, sharing personal experiences. One claim states that after selling 2 million NTD worth of dividend stocks, the poster was required to pay an additional 230,000 NTD in taxes. The post further urges readers to send private messages or join a LINE group to receive more investment analysis.

The Fact-Checking Center points out that the accounts behind these posts are registered overseas. At least two accounts have published similar "230,000 NTD ignorance tax" posts, with identical names, bios, and profile pictures, raising serious doubts about their authenticity.

Regarding the rumor, Taipei's tax authority clarifies that the posts fail to specify whether the tax in question is securities transaction tax or income tax, making the claims ambiguous.

What's the difference between securities transaction tax and income tax? How should dividend income be reported to save on taxes?

The tax authority explains the difference between securities transaction tax and income tax. If it's securities transaction tax, the current rate is 0.3%. Therefore, selling 2 million NTD worth of stocks would incur only 6,000 NTD in tax, not 230,000 NTD.

If it's income tax, individual capital gains from selling listed or OTC stocks are currently exempt from taxation. Therefore, it's more likely that the tax in question relates to "dividend income," not capital gains from stock sales.

Currently, there are two ways to calculate dividend income tax:

1. Include dividend income in comprehensive income tax and claim a tax credit of 8.5% of the dividend amount (capped at 80,000 NTD) 2. Apply a flat 28% tax rate on dividend income separately

For high-income individuals in the 40%+ tax bracket, the 28% separate taxation option may be more beneficial.

Do you have to pay additional taxes when selling dividend stocks? What does the tax authority say?

Regarding "additional taxes," Taipei's tax authority adds that as long as taxpayers file and pay taxes normally during the annual May tax season, there should be no issue of having to pay additional taxes. The public is encouraged to contact local tax offices if they have concerns.

The report also warns that the Fact-Checking Center has recently identified numerous Threads accounts spreading false information about stock trading, such as "0050 is about to split again." These posts follow a similar pattern, often urging users to follow or join LINE groups to receive "hot stock codes" and investment analysis. Many of these accounts are newly created and are mostly registered overseas.

Police have also urged the public to report any suspected fraud immediately.

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