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Securities
1. Ruling for Directions for the Conduct of Wealth Management Business by Securities Firms
On 10 April 2020, the Financial Supervisory Commission (FSC) announced a ruling in connection with Article 24 of the Directions for the Conduct of Wealth Management Business by Securities Firms to replace a ruling announced in 2014. The new ruling further allows that when securities firms conduct wealth management business by means of trusts concurrently operating monetary trusts, they can invest in domestic insurance products in accordance with the Article 3 of the Regulations Governing the Financial Investment, Management, and Utilization of Repatriated Offshore Funds.
Reported by: Jeffrey Liu / Mindy Liao
Commodity Labeling Act
2. Draft amendment to Commodity Labeling Act
On 10 April 2020, the Ministry of Economic Affairs (MOEA) announced the draft amendment to the Commodity Labeling Act for public consultation. We summarize it below:
(1) The commodities sold online shall also be subject to the Commodity Labeling Act, and the competent authority would be authorized to order the online platform operator to provide the information of the publisher, seller or buyer.
(2) Some goods, such as second-hand commodity, precious goods, and antiques need not be labeled in accordance with the Commodity Labeling Act.
(3) The obligor to label and the timing to do so are specified.
(4) Labelling shall be made on the commodity, packaging or instruction manuals. Competent authority is authorized to designate the specific commodities to which electronic labelling applies.
(5) Competent authority may announce violators' name and irregularities if any retailer, manufacturer, importer and packaging business operator are fined for breach of the labelling obligations provided by the Commodity Labelling Act.
Reported by: Kang-Shen Liu / Paul Hsu
Pharmacy
3. Draft amendment to Enforcement Rules of Pharmaceutical Affairs Act
On 8 April 2020, Taiwan Ministry of Health and Welfare announced the draft amendment to Articles 27 and 31 of the Enforcement Rules of Pharmaceutical Affairs Act (Rules), which is summarized below:
(1) It is stipulated in the Rules that the labeling, insert, and packaging of the exported pharmaceuticals shall meet the regulations and practices of the pharmaceuticals in the country to be imported, and accordingly the requirement that for an exported pharmaceutical, the font size of the text in a foreign language shall be smaller than that of the Chinese text is to be excluded from Article 27 in the draft amendment to the Rules.
(2) The requirements for the change of the labeling, insert, and packaging of exported pharmaceuticals are stipulated in the Regulations for Registration of Medicinal Products pursuant to paragraph 4, Article 39 of the Pharmaceutical Affairs Act, and accordingly the repetitive description is to be deleted from Article 31 in the draft amendment to the Rules.
Reported by: Jolene Wang / Huaili Lu
Taxation
On 13 April 2020, the Ministry of Finance (MOF) announced that due to the outbreak of Covid-19, the period for filling the income tax returns and payment for 2020 is extended to 30 June 2020. We summarize below:
(1) To align with the extension of filing the income tax returns and payment, the following periods are also extended:
(a) The period for inquiring the taxable income and deduction is from 28 April 2020 to 30 June 2020.
(b) The required documents for filing the consolidated income tax returns through the internet shall be submitted to the designated agencies by 10 July 2020.
(c) The required documents and reports issued by CPAs to be submitted for profit-seeking enterprises and charities filing through the internet, shall be submitted to the designated agencies by 31 July 2020; such materials may also be uploaded on the e-Filing and tax payment network system by 30 July 2020.
(2) The first batch of tax refund for the consolidated income tax of 2019 will be made on 30 June 2020.
Reported by: Stacy Lo / Bella Chiu
5. Draft amendment to Standards for Exemption and Reduction of Penalties for Tax Violation
On 10 April 2020, the MOF announced the draft amendment to the Standards for Exemption and Reduction of Penalties for Tax Violation. We summarize it below:
(1) For under-reports or omitted-reports of duty paid value or quantity resulting in under-report or omitted-report of commodity tax where the relevant documents attached in accordance with the regulations upon declaring import do not have mistakes, the fine will be deleted.
(2) Considering the current tax structure of the estate tax and gift tax, the threshold for exempting punishment for failure to timely declare the estate tax and gift tax will be adjusted. The same applies to under-reports or omitted-reports.
Reported by: Stacy Lo / Melissa Tsai
Securities
6. Announcement on Scope and Types of Foreign Securities for Which an Operator of Investment Consulting Business for Foreign Securities May Provide Consulting services
On 15 April 2020, the FSC announced a new ruling on the scope and types of foreign securities for which a securities investment consulting enterprise (SICE) concurrently engaging in foreign securities advisory business may provide. According to the new ruling, where the client is a professional institutional investor approved by its competent authority to invest in foreign securities, the foreign securities (except for offshore funds) for which a SICE may provide advisory service shall be exempted from the restrictions of designated foreign securities exchange and relevant credit ratings requirements imposed by the FSC. The Securities Investment Trust & Consulting Association of the R.O.C (SITCA) has also announced a new form for "the application form for the scope of providing consulting services of foreign securities (mandating party who is professional institutional investor)" accordingly.
Reported by: Jeffrey Liu / Doris Huang
Taxation
7. Trading of virtual currency with nature of securities is subject to securities transaction tax at rate of 0.1%
On 16 April 2020, the MOF issued a ruling that trading of virtual currencies with the nature of securities being offered and issued at the amount of no more than NT$30 million in accordance with the Taipei Exchange Rules Governing the Operation by Securities Firms of the Business of Proprietary Trading of Security Tokens, shall be taxed at 0.1% under the Securities Transaction Tax Act.
Reported by: Stacy Lo / Cindy Chien
Company
8. People of China shall not act as a liquidator
On 7 April 2020, the MOEA issued a ruling in relation to whether people of China may act as a liquidator of a Taiwan company. As the existing regulations only touch upon people of China acting a director or a supervisor of a Taiwan company invested, people of China are not permitted to act as a liquidator of a Taiwan company before an appropriate amendment is made to the existing regulations.
Reported by: Mike Lu / Lily Huang
Employment
9. Calculation of average wage
The Ministry of Labor announced a press release on 17 April 2020 that it has issued a ruling on 30 March this year that the wage during the isolation/quarantine leave and family care leave for COVID-19 shall not be included for calculation of the average wage defined under Subparagraph 4 of Article 2 of the Labor Standards Act.
Reported by: David Tsai / Alex Li
Company
10. Business operation
To assist the industries suffered due to COVID-19 outbreak, the MOEA announced on 21 April 2020 the "Application Notice for Salary and Working Capital of Commercial Service Industries Suffered due to Covid-19", under which the government will subsidize 40% of their regular salary of full time employees for 3 months (maximum NT$20,000 per month) and one time working capital of NT$10,000 multiplying the number of full time employees of commercial service industries with tax registration where the revenue declined by 50%.
Reported by: Mike Lu
Public Company
11. Shareholders' meeting
The FSC announced a ruling on 20 April 2020 that, until the Central Epidemic Command Center is discharged, a shareholders of public company attending a shareholders’ meeting is required to wear false mask and cooperate to receive temperature test. Any shareholder not wearing a mask or having fevers reaching forehead temperature of 37.5°C or ear temperature of 38°C for twice in a row shall be forbidden from entering into the venue of the shareholders’ meeting.
Reported by: Mike Lu / Alex Lee
Securities Firms
12. Open the Business for Securities Firms to Engage in the Management of Private Equity Funds and Introduce Professional Investment Institutions and Provide Relevant Services
On 21 April 2020, the FSC announced a ruling to open the business for securities firms to engage in the management of private equity funds and introduce professional investment institutions to engage in the investment and provide relevant services. We summarize it as follows:
(1) A securities firm qualified for the management of private equity funds shall be limited to integrated securities firm only. Such firm is also required to meet certain qualifications, including but not limited to financial requirements, no sanction record, a dedicated department with dedicated personnel, internal control system, and measures to prevent conflict of interest.
(2) The above-mentioned securities firm is also permitted to apply for introducing professional investment institutions to engage the investment in private equity fund and providing relevant services thereof. In this regard, the securities firm is required to have appropriate internal control system and risk/management control in place. Such firm is prohibited from conducting any general advertisement or public inducement.
(3) Once approved, the above-mentioned securities firm shall file monthly report to the Taiwan Securities Association by the 10th day of each month.
Reported by: Jeffrey Liu / Eliza Lee
Company
13. Shareholders' meeting
The MOEA announced a ruling on 16 April 2020 to clarify that a company may file an application to postpone its annual shareholders' meeting on the basis of having a "justifiable reason" if there is any difficulty for it to call the meeting during the COVID-19 outbreak period, provided however that a public company shall follow the securities authorities’ ruling instead if such ruling provides otherwise.
Reported by: Mike Lu / Alex Lee
Banking
14. Ruling for Communicable Disease Control Act
The FSC announced a ruling on 20 April 2020 regarding Article 37 of the "Communicable Disease Control Act", which provides that anyone who has a fever or is not wearing the surgical mask may not enter a bank's business premises from 20 April 2020 until the date the central epidemic command center is disbanded.
Reported by: Stacy Lo / Mindy Liao
Special Act for Prevention on COVID-19
15. Special Act for Control, Subsidy and Revitalization under COVID-19
On 21 April 2020, the President announced the amendment to the Special Act for Control, Subsidy and Revitalization under COVID-19, which provides that the subsidy, allowance, awards and compensation received from the government due to the impact of COVID-19 are exempt from income tax. In addition, the economic stimulus budget was raised from NT$60 billion to NT$210 billion.
Reported by: Kang-Shen Liu / Alex Li
Insurance
16. Amendment to the business scope where insurance brokers and agents may be exempted from the signing requirement
On 22 April 2020, the FSC issued a ruling to announce that for comprehensive travel insurance and travel inconvenience insurance, insurance brokers and agents may be released from signing relevant documents provided that an internal operating procedure of understanding the needs of the proposer and product or service suitability has been established.
Reported by: David Tsai / Cindy Chien
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2020-05-07
