Taiwan

Tax Regulations on Holding a Year-end Party in Taiwan   In accordance with “Business Tax Act”, the prize which is purchased to reward the employees is not allowed to be listed as input tax to offset the output tax. A majority of Taiwan companies usually provide the employees with dinning party, lucky draws the welfare of these kinds, but the nature of these welfares is affiliated with rewarding to the employees, which means the input tax cannot be offset.   For instance, company A held a year-end party on December in 2020 and purchased a variety of prizes for luck draws. The company declared the offset of input tax to output tax incorrectly, which made this company suspicious of illegal declaration intentionally by Taxation Bureau in Taiwan. In this case, the company not only had to recover the amount of taxes, but also faced the punishment of being fined no […]

Increase of Independent Director Seat for Listed Company The 3.0 version of permanent development program of company was issued by Taiwan Securities and Futures Bureau which aims to reinforce the overall operation and power of directors. The program is suitable for all listed companies in Taiwan. The points of this program as following:   Due to a majority of listed companies in Taiwan affiliated as family business, it is expected to set up more seats of independent directors as well as to regulate that the seats of independent directors shall not be less than one-third seats gradually in order to reinforce the function of supervision by board of directors furtherly. Schedule of Program: 2022 Year The guideline for listed company to manage: https://cgc.twse.com.tw/evaluationCorp/listCh。 2023 Year From the related articles revised by Taiwan Securities and Futures Exchange and Purchase Center, it is required that the amount of paid-up capital shall be […]

From the statement issued by Ministry of Labor, the period of spring festival holiday shall be from 31st on January to 3rd on February in lunar calendar, which period shall be affiliated as national holiday, so it is compulsory that the employer shall double the wages with the consent of employee to be on duty within the term by the prescribed laws in “Labor Standards Act”. In regard to the explanation from Ministry of Labor in Taiwan, the regular working days are from Monday to Friday and regular holiday are Saturday and Sunday. The consecutive holidays of spring festive is adjusted into 9 days to follow the “Competent Authority Working Calendar” in 2022. Based on the regulation “Flexible working hours in 8 weeks”,  after the procedure of “With the prior consent of the labor union, or if there is no labor union exists in a business entity, with the agreement […]

According to the definition of 3rd article in “ Measures Governing Investment Permit to the People of Mainland Area”: “ The investors mentioned herein refer to the individuals, juristic persons, organizations, other institutions from Mainland and the companies they invest into in a third area which are, in accordance with these Measures, engaged in investment behaviors in Taiwan area. The invested companies in a third area mentioned in the preceding paragraph refer to the individuals, juristic persons, organizations and other institutions from Mainland and in one of the following situations: (1.) Directly or indirectly holding the shares issued by a company in a third area or the total contributing amount exceeding thirty percent. (2.) Having the controlling power over the companies in a third area. The Statute for Investment by Foreign Nationals shall not apply to the investment in Taiwan area made by the companies in a third area mentioned […]

Due to the global impact from Covid-19, hundreds of Taiwan businessmen abroad are not able to return back to Taiwan, which causes their household registration in their place of residency removed by the competent authority. According to the statement issued by Ministry of Finance in Taiwan recently, the declaration of individual income tax will become recognized much easily. In the circumstance of any doubt about the identity of businessmen, the way of declaration can be proceeded as last year. On the side of land value tax, the application of self-occupied preferential rate is not required the household registration shall be “Personally”. The household registration can be registered as the spouse or lineal relatives. On the side of individual income tax, those who hold the household registration in Taiwan, live and earn income in the domestic territory, or those without the household registration in Taiwan, but who stay in Taiwan more […]

On November 2021, Ministry of Finance in Taiwan announced the tax treaty with Saudi Arabia is about to be in effect from January 2022. This treaty is not only the 34th effective one for Taiwan, but also the first one for Taiwan to officially connect with Middle East. Currently, the investment items with Saudi Arabia includes engineering, electric engineering, chemistry and computer parts. Upon the treaty in effect, it is undoubted that the trading activities will be more beneficial for both parties.   According to the data from Ministry of Finance in Taiwan , the total trading amount between Taiwan and Saudi Arabia is TWD 5,140,000,000 by the past 8 months approximately, which percentage surges 25.2%. The export of products from Taiwan to Saudi Arabia are automobiles, motorcycles, steel materials; Reversely, the export of product from Saudi Arabia to Taiwan is oil majorly. From the statement issued by Ministry of […]

With the loss of competition with international talents in recent years, the new act “Act for the Recruitment and Employment of Foreign Professionals” (Abbreviated as Foreign Talent Act hereafter) is implemented and validated from December 8th in 2018 to make up for the losses. To increase the willingness for foreigners to work in Taiwan, the government looses the strictness of regulations for foreigners to apply visa, work and stay in Taiwan as well as optimizes the welfare of insurance, rental and retirement to make a better environment for foreigners.   To reinforce the recruitment and keep the international talents ,promote the innovative ability of industries and develop 6 core strategic industries  in Taiwan, it is quite urgent and thirsting for talents all around the world. In addition, for the reconstruction of the cycle of global industries owing to the Covid-19 pandemic, the government further revise the Foreign Talent Act on […]

It is a very common phenomenon that a majority of Taiwan’s businessmen choose to invest in cross-country enterprises. However, according to the article 3rd in Income Tax Act in Taiwan, for the location of head office of foreign enterprises within the territory of Taiwan, such profit-seeking enterprise in Taiwan shall comply with the laws to declare the profit-seeking income tax. The domestic and oversea income shall be declared jointly. In spite of the limited coverage of tax treaty in Taiwan, for oversea enterprises which complied with the tax law in the designated country to pay the amount of taxes, such enterprise is able to present the proof of taxation promulgated by Bureau of Taxation within the territory of designated country to offset the profit-seeking enterprises income tax payables in Taiwan with the paid amount of taxes converted into TWD. Here are two points which shall bear in mind for Taiwan’s […]

CFC Regulation in Taiwan – Individual The purpose of Controlled Foreign Company (Hereafter referred to as CFC) regulation is to avoid profit-seeking enterprise, which established its company in low-tax rate burden country (Profit-seeking enterprises income tax rate less than 14%, like BVI; or only pay the domestic income tax, like Hong Kong or Singapore)without any practical business activity via CFC, evading the tax payable with the practical control or shares to get away with the policy of surplus distribution of the company in Taiwan. Therefore, the policy to curb tax evasion promulgated at the article 43-3 in Income Tax Act was established officially on 27/07/2016 to balance the entire regulation of taxation. With the upcoming deadline of special law of repatriated fund within the last two years till now (the law will be expired on August.), CFC regulation is about to come on the heels of it in 2020 by […]

For the sake of full correspondence of par value of Company Limited by Shares, which was enacted in the old version Company Act in Taiwan, the system of par-value stock was born hereafter. Due to no minimum amount of par value of shares regulated by laws, it is workable to set a super low amount of par value in the articles of incorporate to ease the difficulty of fundraising the amount of par-value stock theoretically, which is lower than the actual amount of par value. However, the explanation issued by Ministry of Finance in Taiwan is stated that the unit of par value shall be “Dollar”, which means the minimum amount of par-value stock in Taiwan must be higher than TWD1. With this explanation, the theory to ease the difficulty of fundraising by the super low amount of par value is no longer accessible. To tackle down the fundraising problem […]