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On 28th, the Executive Yuan passed the proposal by the Ministry of Finance to amend the Value Added and Non-Value Added Business Tax Act paragraph 1 of Article 7. The amendment augmented the purchase of specific goods or services eligible for Value Added Tax (VAT) by foreign enterprises, institutions, organizations or associations which has no permanent business establishment within the territory of the ROC for the purpose of engaging in exhibitions or temporary business activities that meet the particular requirements are qualified for tax refund (on the basis of reciprocal treatment).

If the accumulated consumption amount reached TWD 200,000 to about TWD 400,000 within one year, foreign companies which has no permanent business establishment within the territory of the ROC purchases the goods or services qualified for sales tax for the purpose of engaging in exhibitions, business trips, investigation of market conditions, market research, generation of business, marketing seminars and other temporary business activities in Taiwan maybe eligible for tax refund.

This tax refund measure is limited to foreign countries where the government also provided Taiwanese business entities the reciprocal tax refund treatment. The German Federal Financial Department has agreed to give Taiwanese business entities the VAT tax refund with rebate rate of 19% of the value of goods or services. South Korea as example, sales tax amount has to reach the equivalent of NT 8,190. Whereas for Germany, sales tax has to reach 1,000 or 500 Euros in order to qualify for tax refund.

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The allocation of stock dividends received in year 2005 and after by for-profit enterprises or companies which invest in other domestic profit seeking businesses should be recorded as additional numbers of shares according to the Generally Accepted Accounting Principles. The cost of each share or book value per share should be recalculated based on total number of shares after the distribution of stock dividends. The cost of selling this type of stock dividends should be determined based on the cost of share before the market open or derived from the book value under the Income Tax Act Article 4-1. The same rules apply to the calculation of gains and losses of securities transactions by profit-seeking enterprise under the Income Tax Basic Act Article 7, section 1, item 1 and section 2.

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Ministry of Finance will address natural disasters such as earthquakes, normal stages of implementation of the extension of tax payment or stop-gap measure.  Including income tax, comoodity tax, business tax, alocohol and tobacco tax of four national taxes, will provide sub-permanent, deferred tax mechanisms, including last year’s Morocco typhoon affected households, as long as with proofing documents, in May of this year income tax return also may apply for points, extension of tax.

Last  year, due to the cause of global financial tsunami crisis, Ministry of Finance first announced the implementation o the extension of tax measures; a total of more than 10,000 cases filed which estimated in total of 21.2 billion Yuan for income tax deferment.

On the 7th of April, Treasury Department will issuance, in the next incident of property damage due to natural disasters who may request authority to grant an extension or installment taxes to these four tax contributions: income tax, sales tax, excise taxes, alcohol and tobacco tax.  Among them, the installment tax payment up to three years, deferred tax is up to three months.  Ministry of Finance stressed that only income tax may have both the installment tax payment and deferred income tax benefits.

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Responding to the trend toward environmental protection and the need to reduce air pollution and carbon dioxide emissions, the Executive Yuan recently approved a draft revision of the Commodity Tax Act that will cut the tax by NT$25,000 for each newly purchased and registered LPG (liquefied petroleum gas) /gasoline dual-fuel vehicle for five years, beginning with the date of the revised law’s implementation. With the NT$25,000 refueling vouchers that are already being offered for the new purchase or retrofitting of dual-fuel vehicles, this adds up to a total saving of NT$50,000 per vehicle.
The Ministry of Finance notes that current government policy calls for the development of high-energy-efficiency and low-pollution vehicles. Since the vehicles used in Taiwan primarily use gasoline or diesel fuel, which cause relatively high emissions of carbon dioxide, the government hopes that the proposed tax cut will boost the incentive for drivers to buy dual-fuel vehicles and for the auto industry to develop or import dual-fuel vehicles. Approximately 5,200 vehicles are expected to receive this benefit within five years. Continue reading »

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Four new agreements will be signed between Taiwan and China. The issue of intellectual property rights (IPR) will be included in the 5th round of cross-strait negotiations.
Chen Yunlin, president of the Beijing-based Association for Relations Across the Taiwan Strait (ARATS), made the remarks at a press conference in Beijing before starting his trip to Taichung City in central Taiwan. He said the four pacts on fishing crew cooperation, agricultural quarantine inspection, industrial product standards, inspection and certification, and the avoidance of double taxation are extremely meaningful for the cross-strait peace as well as economic and trade cooperation between the two sides.

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In addition, Taiwan’s financial reporting standards will gradually converge to the International Financial Reporting Standards (IFRS), which are principle-based. Such convergence requires no exception, least regulations and professional judgments. Continue reading »

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According to WEF’s “World Competitiveness Report” published on October 8, 2008, Taiwan ranks number 8 in the world because of abundant R&D talents. According to the “Science and Technology Development Survey” conducted by the National Science Council, the number of researchers for every thousand employees in Taiwan has grown stably, from 7.8 person-year in 2003 to 10.0 person-year in 2007, which are higher than South Korea, United Kingdom and the US. In addition, the number of researchers for every thousand employees in Taiwan is 10.0 person-year behind only Finland and Japan, slightly higher than 9.6 person-year in the United State. Moreover, the research workforce has grown conspicuously in recent years. The average growth rate was 8.3% between 2003 and 2007. Continue reading »

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The types of GUI and their usage are as follows:

GUI in triplicate
A VAT-system business entity sells goods or services to another business entity (usually business-to-business)

GUI in duplicate
A VAT-system business entity sells goods or services to a non-business entity Continue reading »

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For foreign professionals, prerequisites for a work permit depend on the education level and the working experience of the applicant. The duration of a work permit shall not exceed 3 years and applications for extension can be submitted based on business needs.

In order to better utilize mainland China’s specific industry knowledge and technology, currently visa applications are open to mainland-area professionals with requisite skills or knowledge. However, the total period of stay is limited to 6 years. Professionals from China may also obtain a visa to Taiwan under the condition that it is an internal employment transfer within a multinational company. The initial stay may not exceed 3 years; at the end of this initial period, however, subsequent stays can be extended with no fixed limit on the number of extensions.

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A draft partial revision of the Customs Import Tariff, approved recently by the Executive Yuan, will strengthen Taiwan’s industrial competitiveness and bring the island’s tariff schedule into line with international norms. The revision will lower tariffs on 17 tariff lines.
The Ministry of Finance indicates that in the existing tariff schedule, the tariff rates on some parts are higher than those on finished products. To promote the rationalization of the tariff structure, the current revision will reduce the tariff on auto engines and some parts. To raise industrial competitiveness, the revision will also lower the tariff on such parts as eyeglass products, LCD displays, and camera lenses.
In addition, pursuant to the policy of conserving energy and reducing carbon emissions, the draft revision also cuts the tariff on public buses fueled by natural gas and lowers the tariff to zero for parts used in the manufacturing of hybrid public buses, electric public buses, and buses for the handicapped.

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