|
Criminal Code
1. Draft amendment to Criminal Code of the Republic of China
On May 25 2020, the Ministry of Justice announced the draft amendment to the "Criminal Code of the Republic of China" that the court will have the discretion to decide on whether or not to increase the sentence where the sentence of a recidivated crime committed can be convertible to fines or community service and the sentence increased will be too severe so as to be in line with the rationale of the Judicial Yuan Interpretation No.775.
Reported by: David Tsai / Alex Li
Labor
2. Amendment to Article 80-1 of Labor Standards Act
On 22 May 2020, the Legislative Yuan passed its third reading of the amendments to Article 80-1 of the Labor Standards Act that where an employer is fined for a violation of the Labor Standards Act, in addition to an announcement of name of the employer and its responsible person, the competent authority shall also announce the date of disposition, article violated and the fine amount.
Reported by: David Tsai / Paul Hsu
Taxation
3. Ruling on Article 66-9 of Income Tax Act
On 26 May 2020 the Ministry of Finance (MOF) announced a ruling on Article 66-9 of the "Income Tax Act", which provides that when two subsidiaries of a parent company merge, the surviving company shall credit the carrying amount with investments accounted for equity method used by the parent company to the dissolved company and recognize other equity recorded in the dissolved company’s account book. The difference, namely the excess part which is calculated by the sum of the consideration for the purchase of equity and the amount of other recognized equity deducting the carrying amount, may net off the capital surplus generated from the premium over shares issued. The remained difference may further net off the retained earnings on or before 1997 and on and after 1998 sequentially. The after-tax earnings netted off based on the above method may be deducted from the undistributed earnings of the levy of an additional profit-seeking income tax.
Reported by: Stacy Lo / Melissa Tsai
4. Amendment to Regulations Governing Application for Exemption from Profit-seeking Enterprise Income Tax by Private Institutions Participating in Public Infrastructure Projects
On 18 May 2020, the MOF announced an amendment to the Regulations Governing Application for Exemption from Profit-seeking Enterprise Income Tax by Private Institutions Participating in Public Infrastructure Projects, which we summarize below:
(1) The definition of "taxable income" is amended.
(2) The "forest recreation area" originally an agricultural facility was changed to "sightseeing and leisure facility"; and the "social housing" and "government office building" were included to be exempt from profit-seeking enterprise income tax.
Reported by: Stacy Lo / Bella Chiu
5. Profit-Seeking Enterprises Adopting IFRS 16 since 2019
On 22 May 2020, the MOF announced a ruling for the profit-seeking enterprises adopting the International Financial Reporting Standard 16: Leases (IFRS 16) since 2019, to declare the Profit-Seeking Enterprise Income Tax. Except that the estimated costs for dismantlement, movement or reduction shall be recognized as the actual expenses, the service life for recognizing as depreciation shall not be less than the minimum years specified under the Income Tax Act, and that the asset impairment losses and the valuation gains and losses, which are evaluated by the relevant International Accounting Standards, shall be adjusted for deduction upon the declaration, the profit-seeking enterprises shall recognize the relevant costs and expenses in accordance with IFRS 16.
Reported by: Stacy Lo / Lily Huang
Insurance
6. Amendment to Insurance Act
On 22 May 2020, the Legislative Yuan passed the third reading of the amendment to the Insurance Act. We summarize below:
(1) Where the insured of a life insurance contract is a minor under the age of 15, except for the payment for funeral expenses, the rest of the payment for death takes effect when the insured reaches the age of 15. The insurance amount for funeral expenses above shall not exceed half of the deduction amount for funeral expenses related to estate tax under the Estate and Gift Tax Act.
(2) Where a trust enterprise acts as a trustee of an insurance trust in accordance with the Trust Enterprise Act, and the beneficiary of the trust contract is the same as the beneficiary of the insurance contract, who is limited to the insured, the minor, and the person whose guardianship has not been revoked, the trust payment made from the principal shall be deemed as an insurance payment.
Reported by: David Tsai / Aaron Lai
Securities & Futures
7. Amendment to Securities Investor and Futures Trader Protection Act
On 22 May 2020, the Legislative Yuan passed the draft amendments to the Securities Investor and Futures Trader Protection Act. We summarize below:
(1) To allow the protection institution to file an action against former director/supervisor on behalf of the company.
(2) Provisions in relation to lawsuit against former director/supervisor on behalf of the company and lawsuit for dischariging director/supervisor shall be applied mutatis mutandis to foreign companies under the Securties Exchange Act.
(3) To extend the application scope of the protection fund by including investment in securities of emerging stock company.
(4) To amend the procedure of producing, reviewing, and the service of the mediation agreement.
(5) The amendment shall be applied to lawsuits against former director/supervisor on behalf of the company and lawsuits for dischariging director/supervisor filed by the protection institution prior to this amendment becomes effective but the proceedings of which have not been concluded yet.
Reported by: Jeffrey Liu / Mindy Liao
Fund
8. To release the scope of securities transactions for fund of funds so as to facilitate its investment efficiency
On 26 May 2020, the Financial Supervisory Commission (FSC) issued the ruling of Gin-Kuan-Jen-Tou-Zi No. 1090362109 for relaxation that the fund of funds (FOF) of a securities investment trust enterprises (SITE) may engage in transactions of bond futures and interest rate swaps to increase its investment efficiency.
In the event that an established FOF needs to engage in the above securities transactions for hedging purpose or to increase its investment efficiency, the trust deed of the FOF shall be amended accordingly with disclosure of relevant risks in the prospectus. Where the said amendment does not change the product position and basic investment guideline/ strategy of a FOF, the SITE does not to call a beneficiaries' meeting, but shall apply with the FSC for approval of the amendment by attaching a legal opinion that there is no significant impact on investors.
Reported by: Jeffrey Liu / Jack Tai
SITE/SICE
9. Ruling Clarifying Whether Securities Investment Trust Enterprise Providing the Beneficiary Roster to the Financial Institutions is in Accordance with the Personal Data Protection Act
On 27 May 2020, the Securities Investment Trust and Consulting Association (SITCA) forwarded the official letter of National Development Council to clarify whether it is in compliance with Article 20 of the Personal Data Protection Act if a SITE provides beneficiary roster of a fund and relevant identity information to other financial institutions during the course of account opening for the purpose of countering financing terrorism and KYC procedure. The collection and processing of the beneficial owner's information by the financial institutions is based on the Money Laundering Control Act and relevant regulations, and so is the SITEs when they provide such data to the financial institutions. Therefore, it is in complaicne with the circumstance "expressly required by law" as provided by the Personal Data Protection Act.
Reported by: Jeffrey Liu / Doris Huang
Cable
10. Rules Governing Review of Renewal of Operational License of Cable Radio and Television System Operators
On 18 May 2020, the National Communications Commission preannounced amendments to Article 15 of the "Rules Governing Review of Renewal of Operational License of Cable Radio and Television System Operators", pursuant to which no more administrative hearing is required for renewal of operational license.
Reported by: Kang-shen Liu
Public Health
11. Act of Professionals Certified in Public Health (CPH)
On 15 May 2020, the Legislative Yuan passed its third reading of the Act of Professionals Certified in Public Health, the effective date of which will be announced later. The objects are to construct the professional certification system in public health, define the rights and obligations of the professionals certified in public health, promote the profession and development in public health, and enhance civil health. Professionals certified in public health practice may be employed by a medical or health care or long-term care institution, a certified public health firm, or other institution or place approved by the competent authority. The professionals’ practices include assessment of environmental health risks, investigation and prevention of epidemics, investigation and enhancement of civil health, and programming, promoting, and assessing projects for investigation of food safety risk and quality control, but shall not be involved in any medical practice. In addition, a professional certified in public health might be requested by the government to deal with emergency or major public health events.IP
Reported by: Jolene Wang/ Huaili Lu
|
2020-06-05
