Taiwan's day-trading tax cut, explained: rate, deadline & how it works
Last updated: 2026-07-20
Taiwan halves the securities transaction tax on same-day day-trade offsets (當沖) — from 0.3% to 0.15% of the sale amount. The current extension passed its third reading in the Legislative Yuan on 2024-12-31, took effect 2025-01-04, and runs through 2027-12-31. It is a temporary tax incentive meant to boost day-trading turnover, set in the Securities Transaction Tax Act — not a permanent rate, and not investment advice.
What the day-trading tax cut is and how the rate is calculated
Normally, selling shares in Taiwan incurs a securities transaction tax of 0.3% of the sale amount, paid by the seller. Under Article 2-2 of the Securities Transaction Tax Act, when a trader buys and sells the same security on the same trading day (day-trade offset, 當日沖銷), the tax on that sale is halved to 0.15%. The buy side is not taxed (Taiwan does not tax purchases); only the sell leg carries this transaction tax, whether it is a same-day round trip or a multi-day hold.
What counts as a day trade under this rule
The law defines it as completing both the buy and the sell of the same security within the same trading day ("當日沖銷交易") — most commonly done as an ordinary cash trade (現股當沖), which is why the popular term is "現股當沖降稅". The halved rate applies to the sell leg of that same-day offset; it does not change margin/short-selling fees, brokerage commissions, or any other cost, which are separate from the securities transaction tax.
Extension history: from a 1-year trial in 2017 to 2027
The halved rate has never been made permanent — it has been extended three times since its 2017 trial: (1) first implemented 2017-04-28 for one year; (2) first extension from 2018-04-28 through the end of 2021; (3) second extension from 2022-01-01 for three years, through the end of 2024; (4) third extension passed by the Legislative Yuan on 2024-12-31, taking effect 2025-01-04 and running through 2027-12-31. Each extension required a new law amendment — it does not renew automatically.
What happens after 2027 — and why the government cut this tax
Under current law the halved rate is set to expire on 2027-12-31; whether it is extended again requires a future Legislative Yuan vote and is not guaranteed, though it has been extended every time it has come up for renewal so far. The Ministry of Finance has described the policy's purpose as boosting stock-market trading turnover and liquidity. This is a statement of legislative intent, not a prediction of future extension or market performance — not investment advice.
Why day traders and program traders track this
The tax rate directly affects the breakeven point of a day-trading strategy — at 0.15% instead of 0.3%, the round-trip cost (tax + commission) is lower, which matters most to high-frequency or program traders running many small trades. Day traders commonly pair this with tick-level order-flow tools (footprint charts, CVD) to time entries and exits; see order-flow & CVD guides and, for chip-side context on who else is trading, margin & short-selling balances.
FAQ
What is Taiwan's day-trading tax cut in one sentence?
It is a temporary halving of the securities transaction tax — from 0.3% to 0.15% of the sale amount — on the sell leg of a same-day buy-and-sell (day trade) of the same security, currently in effect through 2027-12-31.
What is the exact tax rate on a day-trade sale?
0.15% (1.5‰) of the sale amount, versus the standard 0.3% (3‰) rate on ordinary stock sales. Only the sell side is taxed; buying is not.
Until when does the day-trading tax cut run?
Through 2027-12-31, per the extension the Legislative Yuan passed on 2024-12-31 (effective 2025-01-04). It is the third extension since the policy's 2017 trial; each extension has required a new law amendment, so it is not automatic.
What is the legal basis for the day-trading tax cut?
Article 2-2 of Taiwan's Securities Transaction Tax Act (證券交易稅條例第2條之2), which sets the halved rate and its sunset date; amendments to extend it are passed by the Legislative Yuan and announced by the Ministry of Finance.
Will the tax rate go back to 0.3% after it expires?
Under current law, yes — the rate reverts to the standard 0.3% on 2028-01-01 unless the Legislative Yuan passes another extension before then. It has been extended every time so far, but a further extension is not guaranteed. Not investment advice.
Why does the tax cut matter for TAIEX trading volume?
The Ministry of Finance states the policy's goal is to boost trading turnover and market liquidity by lowering the cost of day trading. Day-trade activity is a meaningful share of TAIEX daily turnover, so the tax rate is one input among many into overall volume — not a standalone predictor of market direction. Not investment advice.
Not investment advice. This is a factual summary of Taiwan's day-trading securities-transaction-tax incentive — a temporary, legislated tax rate, not a signal or recommendation to trade. Sources: Securities Transaction Tax Act Art. 2-2 (National Laws & Regulations Database), Ministry of Finance, Taxation Administration, Ministry of Finance.