Viewpoints
2021-10-20
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 […]
2021-08-25
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 […]
2021-08-23
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 […]
2021-07-22
Several types of shares without certificate, but registration in TDCC (Taiwan Depository & Clearing Corporation), are still deemed as legal issued shares. Such shares are solely levied on transfer tax. However, other types of transacted stocks without certificate are deemed as property transactions. Such transaction is not levied on transfer tax, but levied higher on individual income tax. Here is a similar case occurred recently. A company which original capital is 6 million in TWD. After years gone by, the company is quite reputational and successful, but the founder is too elder to manage this company and decide to transfer his company by stocks in 14 million in TWD to others. Nevertheless, the issued stocks were not certificated by banks, neglectful of the article 162 in “Company Act”, which means it is not a legal stocks transaction, despite of the success of this transfer. The nature of this transaction is […]
2021-07-02
Guide to Taiwan Employment Services License According to the definition as “Employment Service Act” and “Regulations for Permission and Supervision of Private Employment Services Institution”, Employment Services is an institution to search the suitable jobs for seekers and collect the labor force for requesters, which services include recruitment, introduction, alteration of jobs and the physical check-up and entry or exit of employees, etc. from the request of employers. Any of individual or incorporation who intends to offer the abovementioned services shall apply for Employment Services License at Ministry of Labor in Taiwan. Ministry of Labor is the authority responsible for the issue and supervision of Employment Services License. To apply for Employment Services License in Taiwan, the applicants have to meet the requirements that the applicants’ employees shall hold the professional Employment services licenses. In the circumstance of a company which total number of employees is less than 5 persons, […]
2021-06-18
The Important Notice for Tax Reduction in Taiwan (For whom paid tax in China) For Taiwanese who have any source of income in China, these citizens should declare the individual income tax in May annually with the tax incurred in China jointly. Therefore, If the tax in China has already declared and paid, the tax payable in Taiwan can be deducted from to avoid the event of dual imposition of tax occurring. To whom he/she takes part in any kind of business activity between Taiwan and China regularly, if he/she is an official tax resident in Taiwan, instead of in China, the individual income tax should be declared necessarily. Most of the income in China is able to be his/her tax withheld at source, such as the salary withholding statement in China, which can be the tax payment certificate. For example, an office worker who has to commute from […]
2021-06-02
Due to the surge of COVID-19 infections in Taiwan, the Central Epidemic Command Center currently raised the COVID-19 alert to Level 3, gathering of over 5 people in indoor and over 10 people at outdoor is banned. The Financial Supervisory Commission promulgated that starting from May 24, 2021 to June 30, 2021, all public companies (including listed, OTC, emerging and foreign company listed in Taiwan), shall suspend the holding of AGMs. The key measures are summarized as follows. Suspension Period: From May 24, 2021 to June 30, 2021, during which public companies shall not convene their annual general meetings (AGMs). Statutory requirements that companies listed on the Taiwan Stock Exchange (TWSE) and the Taipei Exchange (TPEx) must convene their AGMs by the end of June and the penalties for failure to meet such requirement are exempted. New date and venue of the AGM to be held in July or August […]
2021-05-06
Chinese Tax Translation of Foreign Exchange Rate in China In accordance with Accounting Law of China provision 12, RMB should be the bookkeeping base currency. If there are other currencies dominate in business operation, one of them can be the base currency for bookkeeping. But it shall exchange into RMB when compiling Accounting Financial Report. However, Chinese Tax Law and Accounting Law have different provisions on Foreign Exchange Conversion, as well as the exchange rate for different tax types. The following are the provisions on Foreign Exchange Conversion of several main types of taxes in China: Value-added Tax, Consumption Tax, Resource Tax, Land Appreciation Tax Enterprises shall convert any foreign currency into RMB if have the revenues subject to above tax categories. The exchange rate shall be the PBC’s exchange rate on the day of the sales or on the first day of the month. Enterprises shall determine […]
2021-05-06
Introduction to Seals and Chops of a Hong Kong Company In respect of a company registered in Hong Kong, the “chops” we use on a daily basis are the signature stamp and the small round chop. The company name or the word of “For and on behalf of” is engraved on the chop, and usually be used when the authorized person signs the commercial documents. However, both the old Companies Ordinance (previously Cap. 32) of the Hong Kong legislation and the new Companies Ordinance (Cap. 622) only provide rules for the adoption and use of the “Common Seal”. Only a seal that is made, adopted and used in accordance with the Companies Ordinance (“CO”) and articles of association is the Common Seal of a company. In other words, the CO does not provide provisions on the signature stamp nor the small round chop. These two seals are […]
2021-05-06
Comparison of Subsidiary and Branch Office in Hong Kong The subsidiary company (in the form of a company limited by shares) and Non-Hong Kong company (known as branch office) are the two most commonly used investment vehicles for foreign companies to establish and carry out business in Hong Kong. A Non-Hong Kong company, also commonly known as branch office, is considered an extension of the foreign company and is not a separate legal entity of its own. This means that the foreign company is responsible for the liability of its non-Hong Kong company. Additionally, the foreign company can also be sued in Hong Kong in the case of any dispute. A branch office is also subject to same compliance requirements applicable to a subsidiary, except that of auditing of financial statements. In accordance with the Companies Ordinance (Chapter 622 of Hong Kong laws), the annual financial statements […]