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Tax
1. Restrictions on taxpayers exiting Taiwan
On December 31, 2014, the Ministry of Finance ("MOF") promulgated the "Directions on Restricting Tax Debtors or Responsible Persons of Tax Debtors if they are Profit-seeking Enterprises from Exiting Taiwan" and "Directions for Custom Authorities Handling Exit Restriction Cases." The major points are set forth below:
(1) Where the Tax Authority (or Customs Authority) fails to enforce a restriction order on disposal of assets in accordance with the Tax Collection Act (or Customs Act) or applies to a court for provisional attachment, it shall not report to the MOF to request the immigration authority restrict a tax debtor or responsible person of a tax debtor if they are a profit-seeking enterprise from exiting Taiwan.
(2) The MOF promulgates an appendix prescribing the levels of confirmed and unconfirmed outstanding tax amounts applicable to individuals and profit-seeking enterprises, under which if the person who meets the conditions for being restricted from exiting Taiwan, the Tax Authority (or Customs Authority) shall report to the MOF to request the immigration authority prevent the tax debtor or responsible person of the tax debtor if they are a profit-seeking enterprise from exiting Taiwan.
The Directions above took effect from January 1, 2015. Regardless of whether the order for restrictions from exiting Taiwan be concluded in an administrative appeal process or not, such directions are still applicable pursuant to the rulings issued by the MOF (Ref.: Tai-Tsai-Shui-Zi- 10304656721 and Tai-Tsai-Kuan-Zi-10304656721). If the Tax Authority (or Customs Authority) deems it unnecessary to restrict a person from exiting Taiwan after investigation, it shall lift such restrictions.
Reported by: Stacy Lo / Mark Chen
2. President announced amendment to Article 15 of Income Tax Act
The President announced on January 21, 2015 the amendment to Article 15 of the Income Tax Act ("Amendment"), which changes the calculation methods for the amount of tax leviable on a taxpayer and his (her) spouse's income in relation to Taiwan's consolidated income tax.
For each category of income of a taxpayer, his (her) spouse and dependent(s), except if the taxpayer and his (her) spouse are living separately, may file an income tax return and calculate the amount of tax leviable separately. The taxpayer shall consolidate the income of his/her spouse to file tax returns and calculate the amount of tax leviable.
For calculation purposes, in addition to the current methods: (1) each category of income of a taxpayer, his (her) spouse and dependent(s) are consolidated to calculate the amount of tax leviable, and (2) the amount of tax leviable on the income of a taxpayer or his (her) spouse is calculated separately and that of the other categories of the income of the taxpayer, his (her) spouse and dependent(s) are consolidated for calculation purposes, the Amendment added another method, namely that the amount of tax leviable on each category of income of a taxpayer or his(her) spouse is calculated separately. Taxpayers may choose to adopt any of the aforementioned calculation methods. The Amendment took effect from January 1, 2014.
Reported by: Stacy Lo / Angela Lin
Food and Drugs Administration
3. Effective Date for Provisions Prohibiting “Seal Opening Discount” Promotions Postponed
The Ministry of Health and Welfare (MOHW) announced on December 29, 2014 that the amended Articles 3 and 5 of the Regulations Governing Advertising and Promotion of Formula Foods for Infants or Older Infants would not take effect as of January 1, 2015 (see Issue No. 210 of our Newsletter), as originally specified. A new date for provisions prohibiting “seal opening discount” promotions will be announced by the MOHW in due course.
Reported by: Jolene Wang / Crick Liang
Fair Trade Law
4. Amendment to "Fair Trade Commission Case Guidelines on Business Conduct of Franchisers"
The Fair Trade Commission announced the amendment to the "Fair Trade Commission Regulations on the Business Conduct of Franchisers" and changed the regulation title to "Fair Trade Commission Case Guidelines on the Business Conduct of Franchisers" ("Guidelines"). We summarize the key points below:
(1) Specification of the meaning of "franchise operating relationship in preparation.” This means that the counter-party pays certain fees and signs relevant franchise documents such as draft agreements, letters of intent or memorandums before the franchiser and the counter-party enter into a franchise operating relationship, and both parties agree that if the counter-party drops out, the franchiser may withhold the fees paid or the counter-party shall be liable for any loss suffered by the franchiser.
(2) When recruiting franchisees, unless there is a justified reason, franchisers shall provide important franchise information (including fees for operation, the licensing and use of trademarks, patent rights and copyright and the amendment and termination conditions of the agreement) in writing to counter-parties for their review 10 days before entering into a franchise operating relationship or franchise operating relationship in preparation or before any reasonable period deemed appropriate. The Guidelines also specify that for financial projection information, such as predicted business volume or predicted revenues provided by the franchiser, the franchiser shall also provide the calculation methods or evidence of the performances of current franchisees. Information mentioned above may be provided on compact disk or other electronic media with written consent by the counter-party
(3) Franchisers must deliver the agreement to the counter-party within 30 days of the execution date. Any delay in delivering the agreement due to reasons not attributable to the franchiser (such as the store of a franchisee being located on an offshore island or in a remote area, the process for handling real estate mortgages which are not attributable to the franchiser or a delay attributable to the franchisee), the franchiser may be exempted from the requirement.
Reported by: Stacy Lo / Angela Lin
Personal Information
5. Explanation for fulfillment of obligations prescribed in Article 50 of ''Personal Information Protection Act''
On December 31, 2014, the Ministry of Justice issued a press release to explain the fulfillment of the obligation stipulated in Article 50 of the ''Personal Information Protection Act'' (PIPA). According to the press release, even though the non-government agency has a plan to secure the safety of personal information or a plan to process personal information kept by it after termination of business in accordance with Paragraph 2, Article 27 of the PIPA, the obligations of representatives, managers or other authorized people of a non-government agency under the PIPA are not necessarily fulfilled. Punishments for violations may only be waived on a case by case basis, depending on the scale and organization of the non-government agency and the volume of or content of personal information retained by a non-government agency. In general, selection of suitable personnel, appropriate segmentation of organizations, training, instructions, rectification or correction of misconduct and improvement in facilities that are reasonably and objectively expected are the necessary supervisory actions for non-government agencies to take.
Reported by: Kang-Shen Liu / Caitlyn Kao
Labor
6. Amendments to "Required Documents for Employers Applying to Hire Type A Foreign Worker(s)"
On January 9, 2015, the Ministry of Labor amended "Required Documents for Employers Applying to Hire Type A Foreign Worker(s)". We summarize below:
(1) "Document evidence of operation performance" changes to "Document of operational performance such as annual profit-seeking enterprise income tax return."
(2) For application to work in securities and future enterprises, financial enterprises, insurance enterprises and assistance of business entity accounting affairs, a scan copy of a business license of securities, future enterprise, financial enterprise or insurance enterprise issued by central competent authorities shall be provided.
(3) The work period under the contractor type work permit which is exempted from the requirement to attach a scanned copy of evidence of a diploma and work experience of foreign applicants is amended from 15-90 days to 31-90 days.
(4) For applications to work as manager of foreign-invested enterprises, evidence of a diploma and work experience for foreign applicants shall be provided.
Reported by: David Tsai / Robin Huang
Financial Institutions
7. Amendments to Relevant FSC Regulations and Rulings
On December 26 and December 30, 2014, the Financial Supervisory Commission ("FSC") issued press releases proposing draft amendments to several articles of "Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises" and "Regulations Governing Institutions Engaging In Credit Card Business" respectively. On January 6, 2015, the FSC further issued rulings to amend several articles of "Regulations Governing the Cash Card Business of Financial Institutions" and "Regulations Governing Internal Control and Audit Systems of Institutions Engaging In Credit Card Business". We summarize below:
(1) Considering the trend of electronic transactions, the relevant notifications to non-professional investors by a trust enterprise, notifications to cash cardholders regarding complaint handling procedures or relevant notifications to debtors or credit card holders by a financial institution can be made in writing or by electronic means;
(2) Verification of analysis information from a trust enterprise in connection with know your customer procedure, fee collection from financial institutions or declarations or consent from customers in connection with applications for credit cards can be conducted through (i) signatories of customers; or (ii) other methods which can confirm the identity of customers or may ensure the intentions of such customers;
(3) Deletion of credit rating requirements for applying fo trust business by a bank conducting trust business concurrently; and
(4) With regard to the educational training to the internal auditor or compliance of a credit card institution, the training institutions recognized by the competent authorities shall be the same as the training institutions stipulated in Article 20 of "Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries" and shall refer to relevant regulations of "Review Guidelines for Training Institutions of Internal Auditor of Financial Holding Companies and Banking Industries and Manager with Business or Trading Authorization of Banking Industries".
Reported by: Jeffrey Liu / Judy Tai
8. Amendment of "Rules Concerning Cross-Selling by Financial Holding Company Subsidiaries"
The FSC announced amendment of the "Rules Concerning Cross-Selling by Financial Holding Company Subsidiaries" ("Amendments") on January 9, 2015. For details, please refer to point 4 of Issue No. 215 of the Lexgroup Newsletter.
Reported by: Stacy Lo / Angela Lin
9. Regulations Governing Trust Business of Offshore Banking Units (OBUs)
The FSC issued a ruling on January 5, 2015 in connection with regulations governing OBU trust business. This specified that "foreign currency classes of securities investment trust funds with multiple currency types (including New Taiwan Dollars) issued by domestic securities investment trust enterprises" invested by OBUs' trust businesses may be exempted from the limitation that the investment of such funds in the domestic securities market shall not exceed 30% of their net asset value.
Reported by: Stacy Lo / Angela Lin
Representative Office of Mainland China Companies
10. Amendment of "Chart of Required Documents for Applications of Approval for Representative Offices in Taiwan and Report Filing by Companies from Mainland China" and issue of "Template of Work Plans for Representative Offices of Companies from Mainland China in Taiwan"
On January 9, 2015, the Department of Commerce of the Ministry of Economic Affairs issued an amendment to the "Chart of Required Documents for Applications of Approval for Representative Offices in Taiwan and Report Filing by Companies from Mainland China" adding "Work Plans for Representative Offices of Companies from Mainland China in Taiwan" and issued a template of "Work Plans of Representative Offices of Companies from Mainland China in Taiwan" (Work Plans). The Work Plans shall summarize the background of companies in Mainland China that plan to set up a representative office in Taiwan, their working objectives and goals, budget plans and estimates of spending by the representative office. The names of Taiwanese enterprises that the representative office would like to contact will also be included.
Reported by: Kang-Shen Liu / Robin Huang
Political Donations Act
11. Amendments to Political Donations Act
The President announced three readings of amendments to the Political Donations Act on January 7, 2015, the purpose of which is to offer assistance to minor political parties. Under the amendments, the threshold of ratio of votes gained by such parties to deductible donations contributed by individuals and profit-seeking businesses when declaring income tax is reduced from 2% to 1%.
Reported by: Kang-Shen Liu / Robin Huang
Discretionary Investment Business
12. Amendments to Counter-parties of Discretionary Investment Business
On January 7, 2015, the FSC issued a ruling (Ref. No.: Jin-Guan-Zheng-Tou-Zi-1030052716), together with the correction letter of January 15, 2015 (Ref. No.: Jin-Guan-Zheng-Tou-Zi-1040001035), to stipulate the qualifications regarding the counter-parties of repo transactions in bonds traded by a securities investment trust enterprise or a securities investment consulting enterprise providing discretionary investment services. The counter-parties of the repo transactions in bonds shall be enterprises authorized by the FSC for proprietary trading of securities with certificates issued by the FSC.
Reported by: Jeffrey Liu / Judy Tai
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2015-01-22
