Alternative Minimum Tax and its Effects to the Liabilities of the Listing Companies
|關鍵字:||一般所得額;基本所得額;基本稅額;最低稅負制;所得稅率;所得稅負擔;regular taxable income;basic taxable income;minimum tax;alternative minimum tax act;income tax rate;income tax burden|
The Alternative Minimum Tax Act (AMT Act) has become effective since January 1, 2006. Any changes in the government’s policies or acts relating to finance, tax or economy will eventually affect the business or investment activities of the individual or corporation. Therefore, the implementation of the AMT Act will have impact on the individuals and corporation. The contents of this paper include 1) the background and the purpose of the AMT Act, 2) the comparison with other counties implementing the AMT Act, 3)understanding of the contents and taxation method of the Act and 4) its tax effect to the listing companies of Taiwan based on actual financial data. The major impact of the AMT Act to individuals can be summarized as follows: 1. Insurance indemnities: For the insurance contracts signed after January 1, 2006, the tax exempt amount for AMT is limited to NT$30,000,000 per income tax return. 2. Employee stock bonus: The difference between the sellable price and the par value of the employee stock bonus is included in the tax base of AMT. 3. Gain of securities: Gains from sales of unlisted securities and private mutual funds are included in the tax base of AMT. 4. Overseas income and non-cash contribution are included in the tax base of AMT. The major impact of the AMT Act to corporation can be summarized as follows: 1. The five-year tax exempt income is included in the tax base of AMT. 2. Gains of sales of securities and futures are included in the tax base of AMT. The listing companies are classified into four groups:1) all listing companies,2) the fifty biggest companies in market values, 3) the high-tech companies and 4) the traditional manufacturing companies. According to the 2005 financial statements of above companies, the tax effects to the listing companies before and after the implementation of the AMT Act are analyzed. The conclusion is: those companies that enjoy more tax incentives and have higher market values suffer more income tax burden by the introduction of the AMT act.