Capital gains are taxed by the income tax.
Domestic and foreign, see Taxable income and Tax rates.
Income tax on indirect transfer
Income tax on indirect transfer may apply if a non-resident entity is transferred provided that at least 30 percent of value of the entity is represented by assets located in Argentina and provided that the transferor owns at least 10 percent of the capital of such entity. When the transfer is carried on intragroup, the income tax on indirect transfer is not applicable.
Capital gains tax forms part of the income tax regime. CGT applies to net capital gains relating to assets and notional assets acquired after September 19, 1985. The capital gain or loss 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. Where the sale proceeds are less than the cost base, the taxpayer will incur capital losses. These losses may only be offset against current or future capital gains.
Some assets are exempt from CGT, and certain concessions are available for eligible Australian entities (eg, 50 percent CGT discount for resident individuals and trusts and a 33.3-percent 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 percent up to 22.5 percent.
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 gains obtained in the sale of shares or equity rights are subject to final taxes or corporate income tax, whichever is applicable depending upon the quality of the seller (Chilean resident individual, foreign investor or company).
Preferential rates may apply if there is a double tax treaty in force.
Capital gain is included in taxable income and is not otherwise differentiated from other types of income.
Capital gains tax rate is 10 percent. This tax rate will apply in general to:
Gains obtained on the sale of fixed assets held for, at least, 2 years.
Gains obtained on the liquidation of a company that has been in existence for at least 2 years, in excess to paid-in capital or investment. This rate would not apply to the extraordinary distribution of profits triggered by the liquidation.
Inheritances, gifts, legacies and donations.
Capital gains obtained from lotteries, gaming, or similar activities are taxed at a 20 percent tax rate.
Capital gain is the difference between the sales price and acquisition price and is taxed with a 20-percent 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 gains of corporations, except those derived from sales of shares (ie, participation exemption) are treated as ordinary income.
In general, a capital loss of a corporation 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 gains are generally included in the company’s total ordinary income and are subject to tax at the general rates.
However, capital gains on the disposal of a “reported participation” are exempt, provided that the taxpayer has held the participation for at least 1 year before the disposal. In this context, “disposal,” aside from sale and purchase, refers to contribution in kind as well. A reported participation is a participation in the capital of a company (domestic or foreign, except CFCs), the acquisition of which was appropriately reported to the tax authority, within 75 days from the acquisition date.
Capital gains on the disposal of “reported intangible assets” (ie, acquired or self-developed assets that entitle the taxpayer to royalty income) are exempt, provided that the seller has held the asset for at least 1 year and the acquisition is reported to the tax authority within 60 days from the acquisition date.
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 percent. 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 asset location. Non-resident 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. Notwithstanding the above, foreign resident corporations will not be entitled to the foregoing exemption if more than 25% of its “means of control” are held, directly and indirectly, by Israeli residents, or Israeli residents are entitled to 25% or more of the revenues or profits of the corporation directly or indirectly.
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 3 years, the capital gain can be included over up to 5 years. 95 percent 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 and subject to the recapture rule.
Under domestic rules, capital gains obtained by Mexican companies are treated as ordinary income and taxed at the regular 30-percent tax rate. Non-residents are subject to a 25-percent tax rate on the gross proceeds, or a 35 percent 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 percent. 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.
In Mozambique, the capital gains are a type of income that is subject to corporate income tax, and not a separate and independent tax. Capital gains are taxed at the rate of 32 percent.
In the country, realized capital gains are gains related to fixed assets obtained through the onerous transfer, under whatever title, and those deriving from accident claims or those resulting from the permanent allocation of said elements to purposes not related to the activity performed.
Capital gains resulting from the transfer for valuable consideration of shareholdings in entities whose head office or effective management is located in Mozambican territory, are considered income obtained in Mozambican territory, thus payment of tax in Mozambique is mandatory. Furthermore, any gains resulting from the transfer, direct or indirect, on an onerous or gratuitous basis, between non-residents of shares or participating interests or rights involving assets located in Mozambique, regardless of where such transactions take place, are also considered obtained in Mozambique.
Capital gains are taxed as ordinary income, unless exempt 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. As of January 1, 2021, the liquidation loss scheme is limited to shareholdings that are tax resident in the EU and the EEA (geographical limitation) and shareholdings over which the taxpayers have significant authority (ie, generally shareholdings of 50 percent or more) (material limitation). However, liquidation losses up to EUR5 million may still be taken into account without the geographical and material limitation. In addition, the liquidation must have been completed within 3 years after the moment of ceasing the shareholding or the decision to cease it (temporal limitation). The temporal limitation applies to all liquidation losses.
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 percent.
As a general rule, the capital gains of a Peruvian company will be included as corporate income that is subject to income tax at a rate of 29.5 percent.
Notwithstanding, there are some transactions that are exempt, such as the ones made through the Lima Stock Exchange (LSE), if some requirements are met, meaning 10 percent or more of shares cannot be transferred within a period of 12 months by the transferor and its related parties, and the shares have market liquidity/presence.
Capital gain constitutes a separate source of income starting from 2018 and is taxed at the same rate as ordinary income (19 percent). Exemption is available only in specific circumstances (eg, share-for-share swaps, in-kind contribution of an enterprise or part thereof, or profit distributions that are exempt based on the EU Parent Subsidiary Directive). There is no general participation exemption applicable to capital gains. A participation exemption applies to qualifying dividends (see above).
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).
Fifty percent of the gains derived from the disposal of tangible fixed assets and intangible assets held for at least 1 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-percent corporate profits tax rate.
Income from the sale of unquoted shares and participation in Russian companies held for at least 5 years is taxed at a 0-percent corporate profits tax rate. It is no longer required that the qualifying participations must have been acquired after January 1, 2011 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 percent 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 may be available under an applicable double tax treaty.
There is no capital gains tax in Singapore. However, if the gain can be characterized as a revenue gain (as opposed to being a capital gain), the gain will be taxable at the ordinary income tax rate. Whether a gain is capital or revenue in nature, will largely depend on the intention of the taxpayer when it acquired the shares.
Capital gains tax (CGT) applies to a resident's worldwide assets, and, in the case of a nonresident, 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 percent.
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 percent).
See “Participation exemption.” If the participation exemption regime does not apply, the gain will be taxed at the ordinary corporate tax rate of 20.6 percent.
There are no special rules applicable other than 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) a domestic company or a subsidiary of the foreign company – being considered a domestic company – is required to include any gains arising from securities and futures transactions in its AMT calculation in accordance with the Income Basic Tax Act and, (b) from January 1, 2021, a resident individual is required to include any gains arising from sale of the shares in a private company in their individual AMT calculation in accordance with the Income Basic Tax Act.
A 5-percent 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 re-invested in a new fixed asset, such capital gain is not subject to tax.
In case of a sale of shares of a resident company by a nonresident company, capital gains arising from such transaction are subject to corporate tax.
Capital gains derived from the disposal of shares are exempted from corporate tax at a rate of 75 percent 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-percent 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 nonresident 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 percent of their value from UK land.
Long-term capital gain of non-corporate taxpayers 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.