The Executive Yuan has decided to extend the tax exemption for bonds and bond ETFs for 10 years. It is initially estimated that tax revenue will increase by 15.7 billion in one year.

The Executive Yuan will today pass a draft amendment to Article 2-1 of the Securities Transaction Tax Ordinance, extending the suspension of corporate bonds, financial bonds and passive bond ETFs for 10 years, and including active bond ETFs within the scope of the suspension. The Ministry of Finance stated that as of September this year, there were 103 passive bond ETFs and 8 active bond ETFs. According to the tax assessment report of the Financial Supervisory Commission, due to the increase in business tax and business tax, the tax on bond ETFs and other securities has been suspended. It is initially estimated that the tax revenue will increase by 15.7 billion yuan in one year.

The Ministry of Finance explained that in order to activate the bond market, assist enterprises in raising funds and promote the development of the capital market, the certificate payment tax on bonds and passive bond ETF beneficiary certificates has been suspended since 2010 and 2017. The above tax preferential measures will expire at the end of 2026; after the Financial Supervisory Commission has evaluated that this measure will indeed help the activation and development of the capital market, active measures will also be considered Bond ETFs and passive bond ETFs have similar commodity properties, and the tax treatment should be consistent. A draft amendment to the "Security Tax Regulations" is proposed to extend the tax suspension on bonds and passive bond ETF beneficiary certificates to December 31, 2036, and include active bond ETF beneficiary certificates into the scope of the suspension, and the suspension period will also be until the end of 2036.

In order to continue to invigorate the bond market and assist and promote the development of the capital market, the Ministry of Finance stated that it will actively communicate with the Financial Supervisory Commission and the ruling and opposition parties in the Legislative Yuan, hoping to complete the amendment of the "Securities Transaction Tax Ordinance" before the end of this year to achieve seamless integration.

The Ministry of Finance pointed out that according to statistics, as of September this year, there were 103 passive bond ETFs and 8 active bond ETFs. The Financial Supervisory Commission estimated that after the suspension of the bond and passive bond ETF securities tax in the past 10 years, annual tax revenue increased by approximately 9.1 billion yuan; this time, the tax exemption for bonds and bond ETFs was extended for 10 years. It is initially estimated that the tax revenue will increase by 15.7 billion yuan in one year, mainly due to the expansion of trading volume and the increase in business tax and business tax paid by securities companies.