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Taxation
1. Restriction on Baring Liquidators from Leaving Country
The Ministry of Finance (MOF) issued a ruling on July 11, 2014 (Ref. no. Tai-Cai-Guan-Zi-1031015294) that if a company is in a liquidation process after dissolution and its responsible person is restricted from leaving the country under Article 48(5) of the Customs Act, the person subject to the restriction shall be the liquidator. However, where the liquidator is a lawyer or CPA appointed by the shareholders of the company, or is appointed by the court, instead of by the facto responsible person before the liquidation, he/she shall not be free from the restriction.
Reported by: Stacy Lo / Angela Lin
2. Taxation on Gains from Merger
The MOF issued a press release on July 22, 2014 that if the fair value of identifiable net assets of a dissolved company acquired in a merger exceeds the acquisition cost and is recorded as a gain from bargain purchase in accordance with the IFRS "Merger", such gain may be amortized in the following five years for tax purpose from the year of merger record date.
Reported by: Stacy Lo / Angela Lin
Labor
3. Amendment on Notification Time Limit on Occupational Accident
On July 18, 2014, the Ministry of Labor (MOL) issued a press release that the Occupational Safety and Health Act took effect on July 3, 2014 and the notification period for the occupational accident has been changed from 24 to 8 hours. Any employer failing to do so within the given timeframe will be subject to an administrative fine of not less than NT$30,000 but no more than NT$300,000.
Reported by: David Tsai / Robin Huang
4. Draft Rule for Application of Occupational Safety and Health Act for Occupations related to Public Administration
On July 21, 2014, the MOL announced the Draft Rule for the Application of Occupational Safety and Health Act for Occupations related to Public Administration. The MOL classifies occupations into three categories pursuant to Article 4 of Occupational Safety and Health Act and the Act will only apply to certain occupations depending on their scale, nature and risk.
Reported by: David Tsai / Robin Huang
Food and Drugs Administration
5. Draft Regulations for Categories and Scales of Food Enterprises Subject to Compulsory Registration and Dates of Implementation Thereof
The Ministry of Health and Welfare (MOHW) announced on July 18, 2014 the Draft Regulations for Categories and Scales of Food Enterprises Subject to Compulsory Registration and Dates of Implementation Thereof. We summarize below:
(1) Food Enterprises of the following categories are subject to compulsory registration with the MOHW:
(i) Enterprises dealing in the manufacture, processing and import of food or dealing in the manufacture, processing and import of food utensils, food containers or packaging containing plastic materials.
(ii) Dining enterprises.
(iii) Retailers.
(2) Different dates of implementation for food enterprises with different scales:
(i) New Applicants for factory registration, business registration or company registration are subject to compulsory registration with the MOHW upon promulgation of the present Regulations.
(ii) Food enterprises whose factory registration, business registration or company registration has been done are subject to compulsory registration with the MOHW as of December 31, 2014.
(3) Enterprises dealing in the manufacture, processing, import and retail of food additives must apply for registration pursuant to the ruling dated April 24, 2014 (Ref. No.: Bu-Shou-Shi-Zu-1031300763).
Reported by: Jolene Wang / Crick Liang
Insurance
6. Amendment to Regulations for Establishment and Administration of Insurance Enterprises
The Financial Supervisory Commission (FSC) amended the Regulations for Establishment and Administration of Insurance Enterprises which provide conditions and compliance with respect to capital calculation, owner's equity and various reserve funds for the insurance companies.
Reported by: David Tsai / Angela Chang
7. Amendment to Regulations Governing Foreign Investments by Insurance Companies
The FSC announced the draft amendments to the Regulations Governing Foreign Investments by Insurance Companies which propose that the qualified insurance companies may make the investment by post report for acquiring real estates oversea and in the Mainland China area through investment in special purpose real estate investment company or by trust.
Reported by: David Tsai / Angela Chang
Anti-money laundering and anti-terrorism
8. Template Money Laundering Prevention Guidelines and Anti-terrorism for Securities Firms
The Taiwan Securities Association (TSA) announced a new version of the "Template for Money Laundering Prevention Guidelines and Anti-terrorism for Securities Firms" (Template) on 16 July 2014. We summarize below:
(1) In addition to anti-money laundering, the Points apply to anti-terrorism as well;
(2) Securities firms cannot accept any requests to open an account with false name or pseudonym;
(3) A set of rules to verify identity of customers at specific time are established;
(4) The measures to understand whether customers act for and on behalf of others or act for their own interests are amended;
(5) Provisions governing continuous supervision of accounts and trades are included;
(6) The scope and retention period of trade records are specified; and
(7) The matters which shall be covered by risk management mechanism or internal control scheme are included.
All members of TSA must refer to the Template and revise their "Points to prevent money laundering" by the end of this year.
Reported by: Kang-Shen Liu
Offshore Structured Products
9. Amendments to Regulations Governing Offshore Structured Products
On July 18, 2014, the FSC announced the amendments to the Regulations Governing Offshore Structured Products. We summarize below:
(1) Product reviewing process of offshore structured products for professional institutional clients can be simplified;
(2) Offshore financial holding company meets requirements of the Regulations may act as issuer or guarantor of offshore structured products;
(3) Credit rating requirement is removed from the qualifications of local banks acting as custodians of operating bond of issuers or master agents of offshore structured products; and
(4) Offshore structured products for professional institutional clients may be linked to securities issued by domestic enterprises, beneficiary certificates issued by domestic fund, and products of Mainland China.
Reported by: Jeffrey Liu / Jenny Chang
SITE/SICE
10.Draft Amendments to Regulations Related to Securities Firms, SITE and SICE
On July 17, 2014, the FSC announced draft amendments (Ref. No.: Jin-Guan-Zheng-Quan-Zi-1030027394) to the "Directions for Conduct of Wealth Management Business by Securities Firms", "Standards Governing Establishment of Securities Investment Consulting Enterprises" and Articles 4, 5 and 6 of the "Regulations Governing Conduct of Discretionary Investment Business by Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises ". We summarize below:
(1) To allow a securities broker that engage in the discretionary investment business through trust without first obtaining an approval from the FSC for the discretionary investment business through mandate; and
(2) To allow a securities firm to conduct the business of semi-discretionary collectively managed money trust.
Reported by: Jeffrey Liu / Judy Tai
11.To Allow Dual Head by SITE's Personnel
On July 25, 2014, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Tou-Zi-1030028086) to allow the personnel of a securities investment trust enterprise ("SITE") to concurrently act as the director or supervisor of the companies invested by the SITE's offshore affiliates.
Reported by: Jeffrey Liu / Jenny Chang
12.SICE to Execute Trades for Professional Institutional Clients
On July 16, 2014, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Tou-Zi-1030026986) to allow a securities investment consulting enterprise (SICE) to execute trades for professional investment clients if the SICE is engaged by such professional investment client to provide advisory service. The SICE shall include preventions of conflict of interests and relevant control procedures in its internal control system and report the same to its board of directors for approval. Internal auditor of the SICE shall also prepare audit report monthly.
Reported by: Jeffrey Liu / Judy Tai
Securities Firms
13.Relaxation on Restrictions of Proprietary Trading of Foreign Securities or Derivatives by Securities Firm
On July 25, 2014, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Quan-Zi-1030010224) to amend relevant rulings relating to proprietary trading of foreign securities or transactions in foreign derivatives, including such as (i) to allow a securities firms to engage in derivatives transactions for non-hedging-purpose, (ii) to remove the restrictions for credit rating, (iii) to calculate the total investment in foreign securities and in derivatives respectively, and (iv) to amend the objective that may be hedged by derivatives.
Reported by: Jeffrey Liu / Judy Tai
Banking
14.To Allow Banks to Provide Information and Consultation Service on Offshore Derivatives
The FSC announced the Directions on Providing Information and Consultation Services on Offshore Derivative Financial Products by Banks (Directions) on July 30, 2014, to allow banks to provide information and consultation services on offshore derivative products. We summarize below:
(1) Banks may only provide information and consultation services on offshore derivative products to professional institutional investors under the Regulations Governing Offshore Structured Products (Regulations).
(2) Offshore derivative products mentioned in the Directions include the offshore structured products under the Regulations, provided that the underlying products shall not involve domestic interest rate, exchange rate, and stock index, etc.
(3) Banks shall apply to the FSC for approval and make registration before engaging in such business, and shall report to the Central Bank for record within one week after commencement of such business.
(4) The offshore derivative product information and consultation services are limited to information transmission and providing relevant consultation, and banks shall not make independent pricing, sign the transaction agreements on others' behalf, provide business place to the staff of offshore institutions, or assist offshore institutions to provide financial services in Taiwan. Staffs hired by the banks shall not provide financial services for the offshore institutions in Taiwan other than those mentioned in the Directions.
(5) Banks shall arrange with offshore institutions to receive reasonable profits for providing such services.
(6) Banks engaging in such business shall have at least three business personnel qualified under the Directions for Banks Conducting Financial Derivatives Business.
Reported by: Stacy Lo / Angela Lin
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2014-08-11
