Many real estate transactions involve stamp tax issues. According to the Taichung City Local Tax Bureau, if the other party pays by bill of exchange or check and the name and number of the negotiable instrument are stated on the receipt when the seller receives payment and writes it, the receipt for monetary payment can save 0.4 percent of the stamp tax. Tax Bureau reminds the public to take advantage of the tax savings.
Stamp tax is a type of document tax, which is closely related to daily life. At present, stamp tax is levied on four types of documents: Receipts for monetary payments, deeds for sale of movables, contracting agreements, and contracts for the sale, transfer, and partition of real estate. In real estate transactions, receipts for monetary payment, contracting agreements and contract of real estate are the most commonly seen taxable documents subject to stamp tax.
The Tax Bureau pointed out that in the case of receipts for monetary payment, if the person collecting consideration and issuing monetary receipt, demand the other party to pay with negotiable instrument, including bill of exchange, promissory note, and check and indicate the name and number of the negotiable instrument on the receipt, the receipt will become tax-exempt.
Officials offered an example: if person B paid person A NTD$500,000 and person A issued a receipt to person B when he received the cash, then the receipt is called the receipt for monetary payment and the stamp tax of NTD$2,000 should be paid at the rate of 0.4 percent. However, the receipt is exempt from affixing tax stamp if person A specified in the receipt which bank check he received as well as the check number.
In addition, the Tax Bureau reminds the public that if the construction cost contained in the contracting agreement includes business tax, the business tax amount can be deducted from the total contract price before the stamp tax is paid at the tax rate of 0.1 percent.
If the agreed amount is stated in the contract when two or more contractors are jointly contracted, the payable stamp tax shall be calculated according to the agreed amount; if not, the calculation shall be based on total contract price.
The contract still requires tax stamp affixation, but the name and number of the negotiable instrument can be included on the receipt only if it is a receipt for monetary payment.
Therefore, this receipt will be exempt from stamp tax. Special attention should be paid to the above four types of documents due to the issues of stamp tax and also need to be aware of the payment deadline. When the tax stamp is used, it should be affixed with a sufficient amount and be subsequently cancelled in accordance with the regulations. If the amount of payable tax on the tax document is too large that it is inconvenient to affix the tax stamp, it is possible to apply to the Local Tax Bureau for issuing a tax payment notice and pay the tax accordingly. Yet, the payment should be completed before the payment deadline as well as the document should be affixed the payment certificate on the tax document to replace the tax stamp before it can be used.
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News Source：【Economic Daily News 2021/07/22】
