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Tax
1. Standards for Recognition of Use of Residential Houses for Accommodation and for Leasing by Charities
On June 29, 2014, the Ministry of Finance established the "Standard for Recognition of Use of Residential Houses for Accommodation and for Leasing by Charities" ("Standard"). The Standard is to identify the scope of residential houses for accommodation purposes and for charities to lease. House tax is 1.2% of the current value of the property for residential properties complying with the following:
(1) The house is not leased;
(2) The house is resided in by the owner, his spouse or immediate family; and
(3) The total number of houses belonging to the owner, his spouse and their minor children shall not exceed three.
Reported by: Stacy Lo / Mark Chen
Labor
2. Stipulation on Operation of Labor Pensions
On July 9, 2014, the Ministry of Labor revoked "Guidelines for the Operation of Pension Funds under the Labor Pension Act", "Guidelines for the Operation of Labor Pension Funds" and "Guidelines for the Management and Operation of Labor Insurance Funds", which have been integrated into the regulations of "Guidelines for the Operation of Labor Pensions".
Reported by: David Tsai / Robin Huang
3. Enforcement of First Stage of Occupational Safety and Health Act
On July 2, 2014, the Ministry of Labor issued a press release stating that the amendment of the Occupational Safety and Health Act promulgated on July 3, 2013, will be enforced in two stages. The first stage was enacted on July 3, 2014 and 41 subordinate rules will be amended accordingly. We summarize the key points below:
(1) Extending the application of the Act to all industries and protection to cover all kinds of worker, not solely employed labor.
(2) Enhancing protection of the physical and mental health of workers.
(3) When a worker encounters any concern of the threat of imminent danger, he/she will be entitled to stop work and go to a safe location.
(4) The reduction of the time limit for notification to the labor inspection agency of significant occupational accidents from 24 hours to 8 hours after the occurrence of such accidents.
Reported by: David Tsai / Robin Huang
4. Action Plan to Enourage Outstanding Overseas Chinese and Foreign Students to Work in Taiwan
On July 1, 2014, Ministry of Labor amended the "Qualifications and Criteria Standards for foreigners undertaking jobs specified under Article 46.1.1 to 46.1.6 of the Employment Service Act" to add Article 5-1, which will ease some restrictions for foreign students applying for work permits (such as a minimum salary of NT$47,971).
Reported by: David Tsai / Robin Huang
Fair Trade Act
5. Amendment of Fair Trade Commission Guidelines on Combination Report Cases
On July 7, 2014, the Fair Trade Commission (FTC) announced the amendment of the "Fair Trade Commission Guidelines on Combination Report Cases". The key points are set forth below.
(1) If the combined market share of the enterprises in horizontal combination is less than 25%, and the market share of each enterprise in the combination has not reached 5%, simplified procedures shall apply.
(2) Simplified procedures shall apply to cases where the combined market share of the enterprises in horizontal combination is less than 10%, even if the combined market share of the top two enterprises in a specific market of the enterprises in the combination reaches two-thirds or the combined market share of the top three enterprises reaches three-fourths.
(3) In the case of vertical merger where the general procedure applies, the FTC may consider the "possibility to result in concerted action" as a factor to determine the effect of restricting competition.
(4) In cases with significant concerns about restriction of competition, enterprises may raise the issue of "economic efficiency" for the FTC's consideration.
Reported by: Stacy Lo / Mark Chen
Insurance
6. FSC Predicted to Amend "Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises"
The Financial Supervisory Commission (the "FSC”) predicted the amendment of Article 7 of the "Regulations Governing Business Solicitation, Policy Underwriting and Claim Adjusting of Insurance Enterprises" on July 8, 2014. This states that the internal underwriting system and procedure promulgated by insurance industries shall incorporate insurance reporting mechanisms into underwriting procedures and process charts.
Additionally, the following events shall be prohibited: (1) failure to review the signatures of the policyholder or insured and insurance industry solicitation personnel (2) failure to review the relevant evidence or reported content, as specified by other laws and requirements or permitted by the competent authority, which may prove the policyholder's willingness to buy the insurance.
Reported by: David Tsai / Angela Chang
Securities
7. Amendments to Regulations governing the offering and Issuance of Securities by Securities Issuers
The Taiwan Stock Exchange has sent the latest version of the Regulations Governing the offering and Issuance of Securities Issuers, amended by the Financial Supervisory Commission (FSC), to listed companies and securities underwriters. Please refer to the amendments in Issue No. 199 of the Lexgroup Newsletter for details.( http://www.lexgroup.com.tw/en_in_news.php?n_type=3&sn=136)
Reported by: Kang-Shen Liu / Jenny Chang
Banking
8. Explanation and Compliance Matter of Article 75 of the Banking Act
The Financial Supervisory Commission ("FSC") announced on July 1, 2014 the Explanation and Compliance Matter of Article 75 of the Banking Act, which aims to address the problem of real estate owned by banks exceeding the need for their self use. This may result from factors other than new investment, such as mergers or general assumption of other financial institutions, changes of rights without capital investment (e.g. urban renewal participation), or relocation or abolishment of offices, business warehouses or non-business offices. Such ownership shall not be subject to the self use ratio (i.e. areas used shall reach 50%) before disposal. However, the investment amount shall be counted into the limitation of banks' investment in real estate not for self use, in accordance with Paragraph 3, Article 75 of the Banking Act.
Reported by: Stacy Lo / Angela Lin
9. Draft amendment of Article 26 of the Regulations Governing Authorization and Administration of Service Enterprises Engaged in Interbank Credit Information Processing and Exchange
The FSC announced the draft amendment of Article 26 of the Regulations Governing Authorization and Administration of Service Enterprises Engaged in Interbank Credit Information Processing and Exchange on July 3, 2014. This provides that in addition to loans and credit card business information, financial institutions and financial related businesses appointed by the FSC shall also submit information on derivative products business to enterprises engaged in interbank credit information processing and exchange to enhance banks' risk control.
Reported by: Stacy Lo / Angela Lin
SITE Fund
10. FSC permits privately placed SITE Funds to invest in gold and commodities
The Taiwan Financial Supervisory Commission ("FSC") issued rulings on July 14, 2014 permitting a securities investment trust fund ("PP Fund") privately placed by a securities investment trust enterprise ("SITE") to invest in commodities (such as gold, minerals and other commodities) ("Commodities") and futures/options derived from the commodities ("Commodities Derivatives") that are approved for trading by the local future commission merchants ("FCM"). It also relaxed qualifications for unregistered offshore funds (including hedge funds) to be invested in by such PP Funds. We summarize below:
(1) Commodities and Commodities Derivatives
Investment in Commodities shall not exceed 40% of NAV of the PP Fund. Commodities Derivatives are limited to those approved for trading by the FCM under the Taiwan Futures Trading Act, subject to certain restrictions.
Unless otherwise permitted by the FSC, the total risk exposure of a PP Fund to securities related derivatives and Commodities Derivatives shall not exceed 40% of the NAV of the PP Fund.
(2) Unregistered Offshore Funds (Including Hedge Funds)
A PP Fund can now invest in unregistered offshore funds (including hedge funds) which invest in gold and commodities, provided that (i) the investment by the offshore funds in Mainland China securities and red chip shares shall not exceed the percentage restrictions stipulated by the Regulation Governing Offshore Funds, (ii) the offshore fund institution shall have been established for one (1) year or more and have received no sanctions for the past two (2) years, and (iii) unregistered offshore funds shall have regular reasonable prices available for evaluation.
Reported by: Mike Lu / Jeffrey Liu
11. Amendment to percentage limitation of specific assets held by Securities Investment Trust Funds ("SITE Funds")
On July 8, 2014, the Financial Supervisory Commission ("FSC") issued a ruling (Ref. No.: Jin-Guan-Zheng-Tou-Zi-10300250036) to amend the prescribed percentage of the total amount of assets held in specific ways (e.g. cash, bank deposits, or short-term bills purchased from bills dealers.) by SITE Funds. In particular, leveraged ETF and Inverse ETF, though they are open ended funds, will not be subject to the 50 percent limitation.
Reported by: Jeffrey Liu / Judy Tai
Personal Data
12. Security of personal data kept by non-government enterprises
The FSC issued a ruling on 1 July 2014 that the preparation of "self-evaluation reports" in accordance with Article 15 of the Regulations Governing Security of Personal Data Kept by Non-governmental Enterprises is unnecessary if internal control and audit reports cover all requirements of "self-evaluation reports" and continually improve the protection and security of personal data.
Reported by: Kang-Shen Liu
SITE Fund
13. Amendments to Regulations Governing Securities Investment Trust Funds
On July 3, 2014, the FSC amended certain articles of the Regulations Governing Securities Investment Trust Funds to (1) allow a securities investment trust enterprise ("SITE") to launch leveraged ETF and reverse ETF, (2) provide more flexibility on the calculation of redemption prices of SITE Funds (through trust deed), and (3) request a SITE Fund to produce a semi-annual report audited by the CPA.
Reported by: Jeffrey Liu / Judy Tai
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2014-07-22
