Securities Firm
1. Amendments to the Ruling Related to Securities Firms
On April 27, 2016, the Financial Supervisory Commission (FSC) issued a ruling (Ref. No. Jin-Guan-Zheng-Quan-Zi-1040041400) to announce that securities firms may make endorsements/guarantees for its invested foreign enterprises for their need to issuing corporate bonds. The ruling also requires that securities firms shall submit specific documents to apply for FSC's approval as they handle endorsements/guarantees made for its invested foreign enterprises due to the issuance of corporate bonds, and/or the local financial institutions financing due to business. The accumulated number of endorsements/guarantees made for sole invested foreign enterprises for the aforesaid reasons shall not exceed 5% of the net value of the securities firms, provided that these firms obtain an ad hoc approval where there are special needs. In addition, securities firms shall submit what endorsements/guarantees are being made in their monthly statistics.
Reported by:Jeffrey Liu / Caitlyn Kao
Personal Information
2. The Draft Regulations for Security of Personal Information Kept by Manufacturing Industry and Technical Service Industry
The Ministry of Economic Affairs (MOEA) preannounced the draft captioned regulations (Regulations) on April 25, 2016. We summarize the draft below:
(1) Qualified manufacturers and technical service providers (Enterprises) who retained more than 5,000 pieces of consumers' personal information shall prepare, amend and enforce security plans to protect consumers' personal information within six (6) months from the enforcement of the Regulations.
(2) Enterprises shall periodically check all the categories and volumes of consumers' personal information retained by them; assess the risks; adopt proper security measures; prepare reports, prevention mechanisms, and internal control procedures; and retain relevant records.
(3) Enterprises shall set the authorities of those who have access to consumers' personal information, periodically provide educational trainings, and require these people to return the consumers' personal information in their possession upon the termination of an employment agreement.
(4) Enterprises shall check if international transmissions of personal information are restricted by the MOEA and notify the consumers of the areas to which their information will be conveyed.
Reported by:Kang-Shen Liu / Naiju Kuan
Taxation
3. Draft Amendments to the Income Tax Act
The Executive Yuan approved the draft amendment to the Income Tax Act on April 28, 2016. It is commonly seen a profit-seeking enterprise establishing a controlled foreign company (CFC) in a tax haven, where the revenue will not be distributed so as to avoid taxes. To prevent international tax evasion and maintain fair taxation, the draft amendment provides the major points as follows.
(1) Controlled Foreign Corporations (CFC): Where a profit-seeking enterprise and its affiliates directly or indirectly hold 50% or more shareholding or capital in or have substantial influence on an offshore affiliate entity, such profit-seeking enterprise shall recognize the earnings of such affiliate entity of then current year as investment income according to the holding ratio and period of the shares or capital in such affiliate entity.
(2) Place of Effective Management (PEM)： A profit seeking enterprise established according to foreign laws with the actual management in Taiwan shall be deemed as a profit seeking enterprise with the headquarter in Taiwan and the profit-seeking enterprise income tax shall be levied in accordance with the Income Tax Act.
Reported by:Stacy Lo/ Peter Huang
4. Tax treaty between Taiwan and Italy
The tax treaty between Taiwan and Italy took effect on January 1, 2016. The major tax benefits includes tax reduction on business profits, investment income and income from property transaction. If a Taiwan company engages in business in Italy, as long as no Permanent Placement, Italy will not levy tax on the business profits, and 17% profit-seeking enterprise income tax of Taiwan will be levied. As to investment income, such as dividends, interests and royalty, the maximum tax rate is 10%. Tax on stock transaction will be exempted.
Reported by:Stacy Lo/ Peter Huang
Radio and Television
5. Draft Laws and Regulations related to Radio and Television
On May 6, 2016, the draft ''Telecommunications Enterprises Act'', ''Electronic Communications Act'', ''Telecommunications Infrastructure and Resource Management Act'', ''Act Governing Cable Multi-channel Platform Services'' and ''Act Governing Wireless Broadcasting/Television Enterprises And Channel Providing Service Enterprises'' were passed by the Executive Yuan. They were then forwarded to the Legislative Yuan for review on May 13, 2016.
Reported by: Stacy Lo / Caitlyn Kao
6. Draft ''Review Guidelines for Establishment of Satellite Broadcasting/Television Enterprises and Offshore Satellite Broadcasting/Television Enterprises''
On May 3, 2016, the National Communications Commission issued a ruling to announce the draft ''Review Guidelines for Establishment of Satellite Broadcasting/Television Enterprises and Offshore Satellite Broadcasting/Television Enterprises'', which provides related application qualifications, application documents, review procedures, review times, scoring standards and other matters for applicants applying to establish satellite broadcasting/television enterprises and offshore satellite broadcasting/television enterprises.
Reported by:Stacy Lo / Caitlyn Kao
Labor
7. Amendments to the Act of Gender Equality in Employment
The Legislative Yuan passed the amendment to the Act of Gender Equality in Employment on May 3, 2016, which will take effect after promulgation by the President. Key changes include:
(1) Employers shall grant employees milk feeding/expression time for 60 minutes other than the break time stipulated, and the restriction on frequency is removed. When employees work overtime beyond 1 hour, an additional 30 minutes shall be granted. The age limit on the child of an employee who applies for this benefit has been raised from 1 year to 2 years of age.
(2) The range of employers who shall provide nursing rooms and child care facilities / measures is widened from those who hire more than 250 employees to those who hire more than 100 employees.
(3) When victims go to court because of litigations derived from sexual harassments in workplace, employers shall grant them official leaves.
Reported by: David Tsai
Business Registration Act
8. Amendment to Business Registration Act
(1) Business entities that used the same names in different administrative areas but are now in the same administrative area because of an adjustment to the administrative areas are allowed to keep their names.
(2) Where a final judgment is rendered to prohibit a business entity from using its business name, there will only be a 6-month grace period to amend its name. The business registration can be revoked at the regulator's discretion or by an application of a stakeholder where there is a failure to amend the name.
Reported by: Mike Lu / Peter Huang
Debt Clearance Act
9. Draft Amendment to Bankruptcy Act
We summarize the major amendments below:
(1) Relaxation of commencement of proceedings and scope:
a. Persons applying for debt clearance will do so not only for the reason of insolvency, but also for the reasons of apprehension of insolvency, business suspension due to financial difficulties, apprehension of suspension of business, or assets being insufficient to meet liabilities.
b. Besides natural persons and juridical persons, a non-legal association is also allowed to apply for debt clearance.
c. When the assets of a debtor are insufficient to pay for procedural fees, a natural person can be exempted from debt, and a juridical person can be dissolved by filing an application for declaration of bankruptcy.
(2) Exercise and restriction of the obligatory rights：Preferential right to the property shall be extinguished upon the debtor's provision of a security equal to the value of the claim so as not to deter the debtor from leveraging the property to rebuild business or acquire funds.
(3) Secure creditor rights of the workers：Workers shall have priority to receive the remaining amounts owed to them from without following the debt clearance procedure. If they cannot be paid by other means, the amount shall be no less than six months of wages to be paid to the workers according to the labor contract before the commencement of the debt clearance procedure.
(4) The adjustment of scope of bankrupt estate of natural person:If a debtor made an acquisition of the property for consideration before the termination of the bankruptcy procedure, such property will not be included in the bankrupt estate, and the court may rule which property is not to be included in the bankrupt estate based on the debtor's life style, foreseeable income, etc.
(5) Addition of the reorganization procedure for a juridical person: The applicable targets of a reorganization procedure will not only include shares and bonds of public companies, but also include unlimited companies, limited companies, unlimited companies with limited liability shareholders and any other kind of juridical persons incorporated under the Civil Code and the Company Act with total assets or capital exceeding NT$100 million.
Reported by:Mike Lu / Peter Huang
Finance
10. Amendment to the "Regulations Governing Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises"
On May 9, 2016, the FSC issued a ruling (Ref. No.: Jin-Guan-Yin-Piao-Zi-10540001240) to amend "Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises", relaxing the investment scope of trust assets used by trust enterprises. Please refer to Section Four of Issue No. 246 of the Lexgroup Newsletter for more details.
Reported by:Jeffery Liu / Judy Tai
11. The Executive Yuan Approved the Introduction of Apply Pay and Other International Mobile Payment Platforms
The Executive Yuan approved the introduction of Apply Pay and other international mobile payment platforms on May 11, 2016 where the provision of token services will not be limited to domestic token service providers (TSP). The Executive Yuan also requested the FSC to handle the following matters accordingly:
(1) Local credit cardholders' domestic transactions shall be settled domestically
.
(2) To provide more options to consumers, international mobile payment companies are required to work with domestic non-credit-card payment companies, such as debit cards, electronic stored value cards or third party payment companies, so that domestic companies may use their mobile devices as the platform. Relevant laws and regulations shall be relaxed accordingly.
(3) To help the development of domestic TSPs, the FSC shall coordinate with international mobile payment companies and credit cards institutions to discuss future cooperation matters in order to conduct relevant technology and system interfacing and recognition for token services.
Reported by:Stacy Lo / Angela Lin
Insurance
12. Offshore Insurance Unit
On May 10, 2016, the FSC issued a ruling to indicate that insurance products sold by offshore insurance units established by insurance enterprises according to the ''Offshore Banking Act'' are the ''financial products for which the receipts and payments have been approved by the competent authority'' as set out in Subparagraph 2, Paragraph 1, Article 4 of the ''The Act Governing Electronic Payment Institutions''.
Reported by:Stacy Lo / Caitlyn Kao
Government Procurement
13. Amendments to the "Enforcement Rules of the Government Procurement Act"
The Public Construction Commission preannounced amendments to the Enforcement Rules of the Government Procurement Act (GPA), the key points of which are summarized below:
(1) The scope of "entreating or lobbying" in Article 16 of the GPA is amended;
(2) The definition of enterprises who cannot bid, be awarded bid, be subcontractors or provide assistance to those who win the bid due to conflict of interests and exceptions thereof are amended;
(3) The definition of "personnel of the procurement unit of an entity" in Article 71.3 is added; and
(4) The definition that the government agency is entitled not to make inspection if the enterprises do not dispatch representatives for inspection is amended.
Reported by:Kang-Shen Liu
Fair Trade
14. Concerted Action
The Fair Trade Commission (FTC) issued rulings on May 12, 2016, to elaborate whether the following actions are considered concerted actions. We summarize the key points below:
(1) Cross-selling by department stores and shopping malls is not treated as concerted actions if they are held by the same group and managed by the same team without economic independence.
(2) The rules issued by the Pharmacist Association prohibiting its members to solicit prescriptions by providing gifts are not concerted actions as its purpose is compliant.
Reported by:Kang-Shen Liu / Judy Tai
15. Application of the Fair Trade Act
The FTC issued a ruling on May 12, 2016, to elaborate upon whether the regulations issued by the competent authorities stipulating the pricing formula or other pricing factors, or other administrative actions limiting the competition between enterprises shall apply to the Fair Trade Act (Act). We summarize the key points below:
(1) According to Article 46 of the Act, the Act has precedence over other laws with regards to the governance of any enterprise’s competitive conduct. However, this stipulation does not apply where other laws provide relevant provisions that do not conflict with the legislative purposes of this Act.
(2) Where legal restrictions on competition are to pursue certain goals which in public opinions are more important than competition but market operation may fail such goals, such restrictions shall not be considered as violations to the Act. For example, the Tobacco Hazards Prevention and Control Act does not allow promoting tobacco with gifts or discounts.
(3) Administrative rules which limit competition between enterprises are subject to the Act.
(4) Self-regulatory rules stipulating the pricing formula or other pricing factors issued by member associations without legal basis may constitute concerted actions under the Act even though the rules were reported to competent authorities for record or approval.
Reported by:Kang-Shen Liu / Judy Tai
16. Ruling related to Regulations Governing the Amount of Gifts and Prizes Offered by Enterprises
The FTC issued a ruling on May 12, 2016 in relation to Regulations Governing the Amount of Gifts and Prizes Offered by Enterprises (Rules). We summarize the key points below:
(1) "Similar goods" referred to in items 2 and 3, Article 3 of the Rules mean the goods of the same type and with the same content.
(2) "Value of gifts" in Article 7 of the Rules shall be determined in order according to paragraph 2 of the same Article.
Reported by:Kang-Shen Liu / Judy Tai
2016-05-25
