The Study Of The Implementation And Taxation Practice Of Real Estate Trust In The Tawain

In July 2003, the Legislative Yuan completed the three readings of the Property Securitization Bill of Taiwan. Aggressive planning has since commenced in the relevant industries for the launch of related products. The Ministry of Finance, in the meantime, also launched a number of new products in this field. Whilst the trust-related taxation regulations have been announced by the Government of Taiwan in June 2001, numerous taxation-related issues have emerged in past years. The purpose of this thesis, therefore, is to conduct related research through an inductive approach. Information collection was conducted, as the first step, with regard to the existing status of Property Securitization, either within or outside of the country. For the latter, we mainly refer to the practices in countries where a more mature situation in Property Securitization has been achieved- the "Property Investment & Trust System" in the USA, which applies the "Asset Utilization Pattern"; and the "Property Trust System" in Japan, applying the "Asset Mobilization Pattern". We also consolidated the relevant regulations in Japan and the USA with regard to the taxation on trust and taxation/preferential taxation on property trust. Opinions from domestic companies engaged in the Property Securitization business have also been consolidated, with a view to better understand their operations and tax-related problems encountered. The relevant documents were integrated to support the research and discussion in this thesis, based on which we wish to raise the following suggestions:1. Focusing on the taxation on property trust, sensible and practical standards should be established by the government of Taiwan for the observance by the taxpayers. This will reduce the uncertainty involved in the planning process of property trust, and the need to issue additional explanatory letters as supplements to the regulations.2. When considering the taxation regulations on trust, the authorities should also take into account the relevant financial/accounting standards. When deciding the taxation criteria, the competent authorities should include scenarios where the properties are transferred through disposal actions or mortgages.3. The preferential tax reduction and exemption policies, as supplementary measures for implementing the property trust business, should be taken into account when the government establishes the minimum taxation system. Apart from ensuring the fairness of taxation, efforts are also required from the government in facilitating and encouraging the development of the property trust business.