Jun 08

According to the Company Act Article 356-8, a close company may state in its Articles of Incorporation that its shareholders meeting can be held by means of visual communication network or other methods promulgated by the central competent authority. In case a shareholders meeting is to take place via such methods, then the shareholders taking part shall be deemed to have attended the meeting in person. A close company may also state in its Articles of Incorporation that if it is agreed by all its shareholders, any action to be taken at a shareholders meeting may be taken, without an actual meeting, by written consents to exercise their voting power.

In this case, a shareholders meeting held in accordance as mentioned above shall be deemed to have been convened, and the shareholders who exercise their voting power by written consents shall be deemed to have attend the meeting in person.

written by Good Earth

Jun 05

Shanghai Announces First Round of Tariff Waivers on U.S. Import Items

Statistics released by the Shanghai Customs show that the Shanghai Customs have implemented waivers for the first batch of tariff-imposed US goods. By the application deadline on March 11, 2020, a total of 429 companies have received tax refunds. The total tax refund amount came to RMB 631 million.

Signed Investments in Heilongjiang Free Trade Zone Exceeds RMB 170 billion

According to the Heilongjiang Provincial Department of Commerce, the China (Heilongjiang) Pilot Free Trade Zone has innovated the way of attracting investment during the COVID-19 epidemic by attracting new investments online. By the end of September 2019, the Heilongjiang Free Trade Zone has listed 94 newly signed projects with investment of RMB 175.365 billion.

written by Good Earth

May 19

On 10 December 2019, the Ministry of Finance (MOF) issued Administrative Decree No. 10804651540 providing exemption from CbC reporting for Taiwan entities under a MNE Group headquartered outside Taiwan. The new safe harbor rules prescribe that the Taiwan entity will not be required to submit a CbC report if it meets either one of the following:
• total annual turnover (include operating and non-operating) has not exceeded TWD3 billion, or
• total cross-border controlled transaction amount has not exceeded TWD1.5 billion.

written by Good Earth

Apr 14

The global outbreak of COVID-19 has created significant impacts of to individuals or business entities. Taiwan Ministry of Finance has offered some supporting measures to taxpayers, in terms of tax payment and filing. The below is a summary of the measures prepared by Good Earth CPA.

Supporting Measures provided by the Ministry of Finance for COVID-19

A compilation of a few available supporting measures provided by the Ministry of Finance

1. 因疫情隔離政府會主動延長申報及繳稅期限

Extension for Tax Payment & Filing

Due to severe special infectious pneumonia, taxpayers, who are subject to isolation treatment, home quarantine or centralized quarantine, accordingly, those taxpayers might not be able to prepare and file tax return or pay tax due within the statutory period. Ministry of Finance allows the following extensions.

Tax Category Tax Period Due Date Extension Date
Income Tax 2019 Individual Income Tax May 31, 2020 June 30, 2020
2019 Business Income tax May 31, 2020 June 30, 2020
Income Tax Withheld (Tax Resident) in Feb, 2020 March 10, 2020 March 31, 2020
April 10, 2020 April 30, 2020
May 10, 2020 June 1, 2020
Income Tax Withheld (Non tax Resident) before Jun 1, 2020 Within 10 days after the tax is withheld Within 20 days after the tax is withheld
Value Added Tax March April 15, 2020 April 30, 2020
March and April May 15, 2020 June 1, 2020
For Small Scale Business who pays VAT Quarterly, the first Quarter 2020 May 10, 2020 June 1, 2020
For Small Scale Business who pays by Month April 10, 2020 April 30, 2020
May 10, 2020 June 1, 2020
Commodity Tax, Tobacco and Alcohol Tax and Luxury Tax March April 15, 2020 April 30, 2020
April May 15, 2020 June 1, 2020
Automobile License Tax For the Year 2020 April 30, 2020 June 1, 2020
Property Tax For the Year 2020 June 1, 2020 June 30, 2020

When the deadline of the extension expires, the taxpayers are still subject to isolation treatment, home quarantine or centralized quarantine. The declaration and payment shall be extended for 20 days from the day after the end of isolation treatment.

2. 民眾如果以網路申報或於109年5月11日前以人工申報108年度綜所稅,108年度綜所稅第一批退稅案件,將提前一個月於109年6月30日退稅。
If the individual income tax return is filed online or before May 11, 2020. The first batch of Individual Income tax refund for the year of 2019 will be on June 30, 2020, which is one month earlier than normal date of refund.

3. 自109.4.1至109.9.30期間,中央銀行實施調降利率措施

Taiwan Central Bank cuts interest rates, interest rate reduction measures for the period from April 1, 2020 to September 30, 2020.
(1) Self-use residential loan:
The amount of the loan amount which is less than TWD10 million, Central Bank will cut interest rates by 0.25% and the government owned bank will cut the rate 0.25%, total interest rate reduced is 0.5%.
(2) Consumer loans:
Loans other than residential loans such as credit cards, credits, and car loans will be reduced by 0.75%, within TWD10 million.

Loan Category Loan Amount More Than TWD10,000,000 Loan Amount Less Than TWD10,000,000
Self-use residential loan N/A Interest Rate reduced by 0.5%
Consumer loans N/A Interest Rate reduced by 0.75%

4. 嚴重特殊傳染性肺炎防疫期間,國有不動產合法使用人有緩繳租金(含地上權地租、委託經營經營權利金)需求者,109年度按契約約定應繳納租金,得申請展延繳納期限至109年12月底前繳清,期間免計收違約金及遲延利息。
Rental payment for the State-owned property or land can be applied for extension.
During the epidemic prevention period, the rental payment for State-owned real estate for the year of 2020 can apply for the extension of the payment period till the end of December 2020, and all the interest incurred and penalty for overdue will be exempted.

5. 申請延期或分期繳納稅款
(1) 延期:延長繳納期限1個月至12個月
(2) 分期:分2期至36期(每期以1個月計算)
Taxpayers infected by Covid-19 is allowed to apply for tax payment extension or payment in installments.
(1) Extension: extend the payment period from 1 month to 12 months
(2) Installments: from 2 installment payments to 36 payments (each installment is calculated in 1 month)

6. 藥用酒精原料及口罩關稅調降減免防疫期間藥用酒精原料關稅由20%調降為10%,口罩由7.5%調降至免稅,為期3個月(實施日期自109年2月27日起至109年5月26日止)。
Import Duty Discount or Free for Medicinal Alcohol or Mask.
From February 27, 2020 to May 26, 2020, the import duty for medicinal alcohol & raw materials was reduced from 20% to 10%, and the Mask is reduced from 7.5% to duty-free.

Product Normal Duty Rate Discounted Duty Rate
Medicinal Alcohol & Raw Materials 20% 10%
Mask 7.50% 0%

7. 健保特約藥局接受政府委託代售配銷之防疫酒精免營業稅
The Sales of Rubbing Alcohol (Isopropyl alcohol or Ethanol) or Mask is free of VAT. 
The Pharmacy, who accepts the commission of the government for the epidemic prevention, the sale of Rubbing Alcohol and Mask are free of Value Added Tax and exempt from issuing Government Uniform Invoices.

8. 健保特約藥局辦理代售口罩自政府取得之款項免徵所得稅
The Sales Revenue of Mask is exempt from Income Tax.
The government subsidy received by the Pharmacy, who accepts the commission of the government for the epidemic prevention, for the sales revenue of mask is exempt from Income Tax.

(1) 救濟事業之政府機構、公益、慈善團體進口或受贈之物資,進口後無償供公益慈善救濟之用,依救濟物資進口免稅辦法規定,具備救濟物資進口免稅申請書及相關文件,向衛生福利部社會救助及社工司申請進口免稅,經衛生福利部核明轉送財政部核辦,經財政部核可後,免徵進口稅費。
(2) 捐贈防疫物資給政府

Duty Free for the imported materials or goods which is donated for the purpose of the epidemic prevention.
(1) The epidemic prevention materials, imported or donated by government agencies, public welfare organizations, and charitable organizations and be used for epidemic prevention are free of import duty.
(2) Import and donate the epidemic prevention materials or goods to the government
National or foreign individuals or enterprises, groups, and organizations, who declare customs imported anti-epidemic materials in their own names, donate to our government agencies, and are certified by the Food and Drug Administration of the Ministry of Health and Welfare for epidemic prevention, are exempted from import taxes and fees.

10. 當年度如為虧損可依所得稅法第39條規定於以後10年內盈虧互抵營利事業因疫情影響造成營業收入減少,其營利事業所得稅亦將減少,當年度如為虧損,可依所得稅法第39條規定於以後10年內盈虧互抵 ,減少相關年度應納稅額。
The loss incurred during the year 2020 could be carried forward in the next 10 years.
For a business entity, the loss incurred due to the epidemic, the loss could be carried forward in the next 10 years in accordance with Article 39 of the Income Tax Act.

11. 防疫隔離假之薪資之200%,可自2020年度所得額中減除
200% of Salary paid for epidemic prevention or quarantine leave is deductible for Business Income Tax purpose. 
A for-profit or non-for-profit entity, who pays its employees for epidemic prevention or quarantine leave, according to regulations or the emergency instructions of the Central Epidemic Command Center, is entitled to deduct 200% of the amount of the paid salary when declare its 2020 Business Income Tax return.

12. 小規模營業人營業稅可以調減
The Value Added Tax of Small-Scale Business, with monthly revenue less than TWD200,000, could be reduced.
During the establishment of the Central Epidemic Command Center, the regional taxation bureaus took the initiative to verify the reduction of their sales and to reduce Value Added Tax according to the actual business conditions. The VAT rate for Small-Scale Business is 1%.

(A compilation of a few available supporting measures, which we think are practical, provided by the Ministry of Finance)

written by Good Earth

Nov 02

The drafting of a new economic immigration act targets three categories of foreign talent — professionals, mid-level skilled workers, and Taiwanese expatriates and their offspring.

The primary goal of the proposed legislation will be to boost recruitment and retention of mid-level skilled foreign talent in fields like engineering, manufacturing, and information and communication technology.

Mid-level skilled foreign talent is defined under the draft act as overseas students who graduate from high school or vocational school in Taiwan, workers who have been employed in Taiwan for a certain number of years, and technical staff recruited from abroad.

International students enrolled in specific education programs, such as the Overseas Youth Vocational Training School or Industry-University Cooperation Courses designed for youth from Southeast Asian and South Asian countries are also eligible.

written by Good Earth

Aug 03

Article 4

For a foriegn special professional who has met the requirements in the preceding Article, during the first three years starting from the year when he/she for the first time has resided in the R.O.C. for a full 183 days of the year and has had an annual salary income of over NT$ 3 million, one half of the amount of the salary income exceeding NT$ 3 million of each such year may be excluded from the gross amount of consolidated income of the year for the assessment of individual income tax liability, and if he/she has obtained the income set forth in the provisions of Subparagraph 1, Paragraph 1, Article 12 of the Income Basic Tax Act, such income may be excluded from the income basic tax.
The term “first three years” in the preceding paragraph shall start in the year when the foreign special professional for the first time has resided in the R.O.C. for a period of 183 days or longer, and has had an annual salary income exceeding NT$ 3 million. The first three years shall not start in the year when the foreign special professional starts to apply for the tax incentives under Article 9 of the Act in accordance with Article 5 herein.
The term “salary income” in the first paragraph shall refer to the amount of aggregate salaries which may be calculated in gross amount of consolidated income paid by onshore and offshore employers in accordance with the Income Tax Act and other applicable laws for the foreign special professional’s engagement of the professional work under the provisions of Subparagraph 2, Paragraph 1, Article 3 herein.
If a foreign special professional has not resided in the R.O.C. for a period of 183 days or does not have an annual salary income of more than NT$3 million within the three-year period set forth in the first paragraph, the reduction and exemption of the taxes under Article 9 of the Act may be deferred to other employment periods in the R.O.C. for the year when he/she has resided in the R.O.C. for a period of 183 days and when his/her annual salary income exceeds NT$ 3 million. The total number of years eligible for the reduction and exemption of taxes shall be limited to three years.
The term “other employment periods in the R.O.C.” in the preceding paragraph shall refer to the period a foreign special professional was engaged in professional work and the duration of extensions of a foreign special professional approved.
The deferral period mentioned in the fourth paragraph above shall start from the year of the first-time in accordance with the first paragraph and continue without interruptions for a period not over five years.

written by Good Earth

Nov 02

In order to recruit Ph.D. professionals studying overseas, Ministry of Science and Technology (MOST) provides a subsidy of NTD 6,250 per day for study abroad elites to get a job back to Taiwan without financial worries. In addition, Taishan Investment and Management Consulting Ltd., recruiting Internet of Things, will invest about NTD 40 billion respectively in AI and biotechnology funds with a view to offering more financial aids for the startups.

Ministry of Science and Technology (MOST) launched the first wave of LIFT project this May, recruiting 100 overseas Ph.D. elites who are R.O.C citizens under 45 years old to work back in Taiwan, supported with a total NTD 1.5 million of life subsidies by the government.

A national grade “Taishan Investment and Management Consulting Ltd.,” has been founded and expected to be partly funded at the end of this year. The first wave is to raise funds for the Internet of Things to invest approximately NTD 40 billion in the field of AI. The second wave will be raising funds of NTD 40 billion for the development of biomedical industry, with a view to offering financial aids for the setups.

written by Good Earth

Sep 12

United Daily News Sept. 12, 2017
Dr. Hsu, Jen-Hui/ Professor of Dept. of Public Policy and Management, Shih Hsin University, former Deputy Minister of Finance

Former Premier Lin Chuan’s tax reform proposal prior to his resignation has brought into discussions and questions. It is necessary to decipher and figure out the objective and the beneficiaries regarding the tax reform.

Ministry of Finance claims such reform may narrow the wealth gap and redistribute income, elaborating that the rich and the average may severally benefit an estimated 30 billion gain from the tax reduction for dividend income. The average still benefits from more tax deduction and the rich lowering tax rates. The average’s gain accounts for 60 percent out of a total estimated 100 billion from the tax deduction.

This specious interpretation, however, completely ignores the population of both parties. According to the analysis of 2014 income tax declaration data, the number of the rich people declaring their tax rate above 40% is some 47,000, while the number of the average taxpayers is 6,033,000 strong. The declared dividend incomes of the both parties are fairly equivalent, roughly 430 billion dollars respectively, but an average taxpayer gains less than 5,000 dollars from tax reduction for dividend income, whereas a rich one gains up to 627,000 dollars. It is obvious to see who the beneficiaries are.

The highest individual consolidated income tax rate falls from 45% to 40%, from which the immediate beneficiaries are those who declare their incomes over ten million dollars by 45% tax rate, amounting to 12,143 families in 2014. The tax reform will not only reduce their tax rates but also substantially relieve their anticipated tax burden in that partial exemption or discriminatory tax is imposed on dividend income.

Compared the tax payment situations in 2011 with those in 2012 about the declared taxable income higher than 10 million (the 2011 highest income tax rate was 40% and the tax credit of dividend income was 100%), it reveals that the income tax revenue increases from 89.7 billion in 2011 to 169.8 billion in 2012. It is due to not only the increased numbers of the taxpayers but also the tax rates rising to 45% and the tax credit of dividend income decreasing to 50%.

Now the DPP’s tax reform proposal with a lower tax rate on the income and favorable taxation on the dividend income is actually in favor of those “minorities” who are 2 out of 1,000 taxpayers that their income comprises mostly of the dividend income (about 3/4) while wages consist mainly of the income (about 80%) of the general public.

Ministry of Finance plans to raise the corporate income in response to the losses of tax revenue from the favorable taxation on the dividend income. Although the rich people will receive fewer dividends, the general small shareholders’ dividends shrink as well. The rich enjoy the benefits from the tax reduction, while all of the shareholders must bear together the rising corporate income tax! Given that the corporate income tax increases, the decrease in the net profit may result in falling stock prices, lower investment ability and desire, and even pricier products, and all of these are paid by the general public!

written by Good Earth

Apr 30

19. Company selling investment products should be aware that if an investment product is not the security as stated under the provision of Securities Transaction Tax Act, the income tax that ceased to be imposed as stated in Article 4-1 of the Income Tax Act does not apply.

20. In the case of profit-seeking enterprises selling shares without the certification or authentication as prescribed in Article 162 of the Company Act, it is recognized as property transaction not as securities transaction. Therefore, when declaring gains or losses of such transactions, it is often mistakenly declared as securities transactions with tax exemption.

21. In the case of a profit-seeking enterprise having no permanent establishment but having a business agent within the territory of the Republic of China, the business agent concerned shall be responsible for filing of income return according to Item 2 Article 73 of the Income Tax Act. Because the profit-seeking enterprise is not authorized by the R.O.C. Government, it is not a “foreign company” as defined in the R. O. C. Company Act, which is not a “company” as stated in Item 1 Article 39 of the Income Tax Act. Therefore, there is yet to be any applicable regulations for offset between profits and losses.

22. Profit-seeking enterprises should compute and declare depreciation expenses for individual assets according to an inventory. However, when a Certified Public Accountant making an assessment and certification, he or she only samples and excludes the ones that exceeds the maximum depreciation expense, but neglects the regulations regarding the depreciation of fix assets being continuously presented annually according to the rate as stated in Item 2 Article 95 of Regulations Governing Assessment of Profit-seeking Enterprise Income Tax and thus fails to adjust the depreciation expenses according to regulations.

23. Companies which received government subsidy for research and development expenses not only should declare the subsidy as income but also deduct the amount from the research and development expenses.

24. The losses incurred from the sales of goods or services as prescribed in Article 39 of the Income Tax Act for profit-seeking enterprises is also applicable for educational, cultural organizations or charities, given that the organizations keep a complete set of account books, use the Blue Returns in the years such losses occurred and in the year of declaring such losses, or such losses have been duly certified by a certified public accountant and declared within the prescribed period. Then, the losses can be used as deductions from the sales income in the next 10 years. However, if the losses are not from the sales of goods or services, Article 39 of the Income Tax Act does not apply.

25. Even though a tax return has been duly certified and filed by a Certified Public Accountant before the deadline, if the tax is not paid in full or paid before the deadline, it is stilled considered as regular tax return and the preferential treatments such as a higher entertainment expense limit and the offset between Profits and Losses can no longer apply.

26. In case of a profit-seeking enterprise with its head office within the territory of the Republic of China declaring its incomes from both within and without of the territory of the Republic of China, special attentions should be paid in checking if all the foreign incomes corresponding to the deductibles from taxes paid in the source countries are declared.

written by Good Earth

Apr 29

16. The earnings of a dissolved company in the year prior to acquisition should be declared separately by the surviving company on behalf of the dissolved company rather than combined and declared with that of the surviving company.

17. In an acquisition where stock is used as consideration, the share values of the surviving company and the dissolved company are to be determined according to the Ministry of Finance Official Letters numbered 09804902120 published on November 30th, 2009 and 10304030470 published on December 1st, 2014. If the fair value of the net identifiable assets exceeds the cost of the acquisition, the gain from the bargain purchase recognized according to International Financial Reporting Standard 3-Business Combinations should be divided evenly and declared as business income over the next 5 years starting from the year in which the acquisition date falls.

written by Good Earth