Do I pay securities transaction tax when redeeming a fund, as with stocks?

The Restriction of Special Taxation Act provides that when a collective investment vehicle meeting certain requirements redeems its own collective investment securities, the investor's transfer of those securities is not regarded as a 'transfer' under the Income Tax Act and the Securities Transaction Tax Act.

Therefore, ordinary fund redemptions are not taxed as transfers in the way stock sales are, and income received on redemption is taxed as dividend income. Check with your distributor or the National Tax Service on how individual products are taxed.