Capital gains are taxed by the income tax.
Income tax or indirect transfer
Income tax on indirect transfer may apply if a non resident entity is transferred provided that at least 30% of value of the entity is represented by assets located in Argentina and provided that the transferor owns at least 10% of the capital of such entity. When the transfer is carried on intragroup the income tax on indirect transfer is not applicable.
Capital Gain Tax forms part of the income tax regime. CGT applies to net capital gain relating to assets and notional assets acquired after September 19, 1985. Where the sale proceeds are less than the unindexed cost base, the taxpayer will incur capital losses. These losses may only be offset against current or future capital gain. Capital gain is calculated on the proceeds from the disposal of the asset less its cost base and any incidental costs associated with its purchase and disposal. The taxable part of the gain is treated as assessable income. Some assets are exempt from CGT, and certain concessions are available for eligible Australian entities (eg, 50% CGT discount for resident individuals and trusts and 33.3% discount for complying superannuation funds).
Capital gains resulting from the sale of a shareholding in a resident company are subject to corporate income tax. Capital gains resulting from the sale of a shareholding in a foreign company are, in general, exempt from corporate income tax. However, there are detailed special provisions and restrictions that apply in such cases.
Capital gains realized on the disposal of business assets are treated as business income. Standard corporate tax rates apply in such case. Subject to reinvestment of the sales proceeds in qualifying assets and certain other conditions, the taxation of the capital gain realized on business assets may be deferred.
Subject to certain conditions, capital gains realized on the disposal of shares may be tax exempt.
Capital losses may be deductible depending on the underlying asset.
Capital gain recognized by a legal entity is taxed at the same rate as ordinary income for IRPJ and CSLL purposes. Non-operating losses are deductible. However, non-operating losses accrued in previous years can only be offset in future years with profits of the same nature.
For individuals and non-residents, as from January 1, 2017, capital gains earned as a result of the disposal of assets and rights of any nature are taxed at progressive rates varying from 15% up to 22.5%.
One-half of a capital gain earned by a corporation is required to be included in computing the taxable income of the corporation. Capital losses may be applied to reduce capital gains, but not regular income, of a corporation for tax purposes.
Capital gain is included in taxable income and is not otherwise differentiated from other types of income.
The capital gain tax rate is 10%. This tax rate will apply in general to:
- Gains obtained on the sale of assets held for at least two years
- Gains obtained on the liquidation of a company that has been in existence for at least two years in excess to paid-in capital
- Inheritances and legacies
- Gifts or donations
Capital gains obtained from lotteries, gaming or similar activities are taxed at a 20% tax rate.
Capital gain is the difference between the sales price and acquisition price and taxed with 20% corporate tax rate.
Capital gains realized by corporations that are subject to corporate income tax are treated as regular income, subject to exceptions. One exception is the one that applies to long-term capital gains on shares benefiting from the participation exemption regime, as described above.
Capital gain of corporations, except those derived from sales of shares (ie, participation exemption) are treated as ordinary income.
In general, a capital loss is deductible. However, a capital loss is not deductible if a gain resulting from the underlying transaction would have been exempt from tax. Consequently, a capital loss from sales of shares or write-downs on shares are not deductible.
Hong Kong, SAR
Hong Kong does not tax capital gains. However, the net gains on transactions deemed speculative may be taxable as a taxpayer's trading income.
Capital gain is taxed in India according to its classification as long term capital gain (capital assets held for over 3 years) or short term capital gain. Short term capital gain is taxed at the normal tax rates, whereas adjustments for inflation are permissible in relation to long term capital gain. Capital gains on disposal of shares of companies qualify for shorter holding period as well as different rates depending on whether they are publicly listed on recognized stock exchange in India or not.
Capital gains of a company are taxed at 33%. Capital losses may be set off against chargeable gains arising in the same tax year. Unused capital losses can be carried forward and set off against chargeable gains in future years. Excess capital losses can generally only be carried forward.
Capital gains derived by corporations are generally taxed at the same rate as ordinary income. The inflationary component of the capital gain accrued from 1994 and onwards is exempt from tax. With few exceptions, capital gains are not eligible for the reduced tax rates under the tax incentive regimes mentioned above.
Israeli resident corporations are subject to tax on capital gains regardless of the of the asset location.
Nonresident corporations are subject to tax in Israel on capital gains from disposition of:
- Assets located in Israel
- Assets located outside of Israel if the assets are essentially a direct or indirect right to assets or inventory located in Israel, real estate in Israel, or an Israeli real estate company (with respect to the part attributable to Israeli assets)
- Shares in an Israeli company or
- Shares of a foreign company that is essentially a holder of Israeli assets (with respect to the part attributable to Israeli assets)
Capital gains of a foreign resident from the disposition of securities purchased on the TASE, except for interests in REITs (including a company that ceased from being a REIT) and short term governmental bonds, are exempt from tax.
Capital gains of a foreign resident from the disposition of private company shares, which were bought during or after 2009, are generally exempt from tax, unless the Israeli company value is mainly derived, directly or indirectly, from Israeli real estate, the right to use Israeli real estate or the right to exploit natural resources in Israel.
These exemptions will not apply if the capital gains are attributed to a permanent establishment in Israel.
Capital gains may also be exempt under an applicable tax treaty.
Capital gain is generally included in taxable income. If the asset has been held for at least three years, the capital gain can be included over up to five years. 95% of the capital gain on sales of participation can be exempted if certain requirements are satisfied, as described above.
Generally, capital gain recognized by a corporation is taxed at the same rate as ordinary income. Capital loss may reduce capital gain but not ordinary income. However, with respect to share transfers in certain types of reorganizations, no capital gain is recognized.
Capital gains generally are taxed as ordinary income at the standard corporate tax rates. Nonetheless, capital gains derived from the sale of shares may be exempt from corporate tax if the conditions for the participation exemption are met.
Under domestic rules, capital gains obtained by Mexican companies are treated as ordinary income and taxed at the regular 30% tax rate. Nonresidents are subject to a 25% tax rate on the gross proceeds, or a 35% rate on net gain realized to the extent that certain requirements are met. Capital gains derived from sales of publicly traded shares by individuals or non-Mexican residents are taxed at a rate of 10%. To determine the deductible basis for sales of real estate, fixed assets and shares, the law allows for indexation of the original cost for inflation.
Capital gains are taxed as ordinary income, unless exempted by the participation exemption. Capital losses are deductible, unless attributable to the disposal of a shareholding qualifying for the participation exemption (certain liquidation losses are deductible).
Please see Participation exemption. If the participation exemption regime does not apply, the capital gain will be taxed at the ordinary corporate tax rate of 22%.
Capital gain constitutes separate source of income starting from 2018 and is taxed at the same rate as ordinary income (19%). Exemption is available only in specific circumstances – share-for-share swaps, in-kind contribution of an enterprise or its part, profit distributions exempt based on EU Parent Subsidiary Directive. There is no general participation exemption applicable to capital gains.
Capital gain is taxed at the same rate as ordinary income. Capital gain arising from the disposal of shares may be exempt from tax under the participation exemption regime (see Participation exemption).
50% of the gains derived from the disposal of tangible fixed assets and intangible assets and non-consumable biological assets held for at least one year may be excluded from taxation if the total disposal proceeds are reinvested within the prescribed period.
Capital gain realized by a resident entity is included in its taxable profits and taxed at the same rate as ordinary income. Capital gain derived by a foreign entity from Romania is also taxed at the standard corporate income tax rate. Capital gain tax may be eliminated under the participation exemption regime or under the provisions of tax treaties.
Income or capital gain received from the sale of shares or participation interest in other companies less applicable deductions is taxed at a regular 20% corporate profits tax rate.
Income from the sale of unquoted shares and participation in Russian companies held for at least five years is taxed at a 0% corporate profits tax rate. It is no longer required that the qualifying participations must have been acquired after January 1, 2011 in order for the capital gain exemption to apply for sellers.
Income from the sale of quoted shares in high-technology Russian companies and held for at least one year is no longer eligible for capital gain exemption that used to exist until January 1, 2019. This capital gain exemption in relation to high-technology companies has been suspended until January 1, 2023.
Income or capital gain from the sale of shares in Russian subsidiaries whose immovable property located in Russia represents directly or indirectly more than 50% of assets (as well as finance instruments backed by these shares or participation interests, except for shares traded on the stock exchange) is taxed at a regular corporate profits tax rate.
Reduced tax rates or full protection from withholding tax can be available under an applicable double tax treaty.
There is no capital gains tax in Singapore.
Capital gains tax (CGT) applies to a resident's worldwide assets and in the case of a non-resident, to their immovable property or assets of a permanent establishment in SA.
CGT is triggered on the disposal or deemed disposal of an asset and is calculated as being the difference between the proceeds and the base cost of the asset. Assessed capital losses are carried-forward and may be set-off against capital gains in the following year of assessment.
Provision is made for exclusions and rebates, as well as rollover relief, where the gain made from a disposal is disregarded until ultimate disposal of the assets. The effective capital gains tax rate for corporates is 22.4%.
Capital gain or loss recognized by a corporation is included in corporate ordinary income or loss.
Capital gain recognized by a corporation is taxed at the same rate as ordinary income (ie, 25%).
Please see Participation exemption. If the participation exemption regime does not apply, the gain will be taxed at the ordinary corporate tax rate of 21.4%.
There are no special rules applicable other than the above mentioned participation exemption rules and special rules in certain cantons for real estate capital gains.
Taiwan does not impose a separate capital gain tax (ie, gains from the sale of securities and futures transactions are exempt from income tax). However, a domestic company or a foreign company with a PE in Taiwan is required to include any gains arising from securities and futures transactions in its AMT calculation in accordance with the Income Basic Tax Act.
A 5% profit retention tax is imposed on undistributed profits.
Capital gains derived by all companies are generally taxable as ordinary income. However, if gains arising from the sale of a depreciable fixed asset is reinvested in a new fixed asset, such capital gain will not be subject to tax.
In case of a sale of the shares of a resident company by a non-resident company, capital gains arising from such transaction will be subject to corporate tax.
Capital gains derived from the disposal of shares will be exempted from corporate tax at a rate of 75% if the term of ownership is at least 2 years and the capital gain is in a special fund under shareholder's equity for 5 years following the sale.
Capital gain is treated as a part of taxable income and is subject to standard 18% corporate income tax rate. The Tax Code provides for special adjustment of taxable profit in respect of capital gain.
United Arab Emirates
At present, there is no capital gains taxation in the UAE. For taxpaying entities (such as oil and gas producing companies), capital gains are taxed as part of business profits.
Capital gains realized by a company are taxed at the same rate as trading income. Capital losses may reduce capital gains but not trading income. Certain types of profits and losses – those from debt and intellectual property – are always treated as income under special regimes which reflect the accounting treatment of those types of assets.
Capital gains realized by non-resident companies are not taxed in the UK, even if they arise on the disposal of UK assets, unless:
- The asset is used for the purpose of a trade carried on by the company through a UK permanent establishment, or
- The asset comprises an interest in UK land or comprises certain assets (wherever situated) that derive at least 75% of their value from UK land
Long-term capital gain of non-corporate tax payers may be eligible for reduced tax rates. Capital gain recognized by a corporation is taxed at the same rate as ordinary income. Capital loss may reduce capital gain but not ordinary income.
Capital gains tax is administered separately from income tax in terms of a separate piece of legislation, namely the Capital Gains Tax [Chapter 23:01] (the CGT Act). Capital Gains Tax is payable on the disposal of a specified asset as defined in the CGT Act.