|
Civil Law
1. Amendments to the Civil Code and its Enforcement Acts
On 25 December 2020, the Legislation Yuan passed its third reading of the amendments to the Civil Code, the Enforcement Act of the Part of General Principals of the Civil Code, and the Enforcement Act of Part IV, Family Law of the Civil Code. We summarize below:
(1) Amendment to the Civil Code
(a) The age of major is adjusted from 20 to 18 (amendment to Articles 12 and 13).
(b) A man and a woman under 17 cannot make an agreement of marriage, and cannot conclude a marriage under 18. The provision that a minor cannot conclude a marriage or divorce without the consent of his/her guardian is removed. (amendment to Articles 973, 980 and 1049, and deletion of Articles 981 and 990)
(c) The provisions of the adoption, guardianship, and separation from home of a married minor are removed. (amendment to Articles 1077, 1091,1127 and 1128)
(2) Amendments to the Enforcement Act of the Part of General Principals of the Civil Code, and the Enforcement Act of Part IV, Family Law of the Civil Code
(a) The amendment to Civil Code will become effective on 1 January 2023.
(b) A person who is aged 18 or older but under 20 will become a major on 1 January 2023.
(c) Where a person is aged under 20 with entitlement to the rights or benefits of a major by 1 January 2023 (e.g. entitlement to the capacity to make juridical acts due to marriage), the rights or benefits are still valid.
Reported by: David Tsai / Paul Hsu
Financial
2. Amendment to the Act Governing Electronic Payment Institutions
On 25 December 2020, the Legislative Yuan passed the draft amendment to the Act Governing Electronic Payment Institutions in the Third Reading, which we summarize below:
(1) The Amendment integrates the regulations governing electronic payment and electronic stored value cards, and expands the business scope of electronic payment institutions, adding domestic and international small-amount money transfer and other payment flow business.
(2) Non-electronic payment institutions approved by the competent authority may engage in international small-amount money transfer and related foreign currency trading business for foreigners conducting the works under Subparagraphs 8 to 11, Paragraph 1, Article 46 of the Employment Service Act.
(3) Cross-firms payment flow services are permitted and shall be handled by qualified financial information service companies, and the business operators shall maintain normal operation of their information system.
(4) The Amendment differentiates capital requirements for electronic payment institutions. An electronic payment institution shall have a minimum paid-in capital of NT$100 million. Those with a capital of NT$300 million or less may only engage in collection and payment business as an agent, and those with a capital of more than NT$300 million but less than NT$500 million may engage in receipt of stored value funds and collection and payment business as an agent. As to those with a capital of NT$500 million or more, they may engage in all electronic payment businesses.
(5) The use of funds collected/paid as an agent by specialized electronic payment institutions (institutions engaging exclusively in electronic payment businesses) are expanded and specialized electronic payment institutions may establish foreign branches to expand their business.
Reported by: Stacy Lo / Jack Tang
Insurance
3. Amendment to Compulsory Automobile Liability Insurance Act
On 25 December 2020, the Legislative Yuan approved the amendment to the Compulsory Automobile Liability Insurance Act, which mainly includes:
(1) Amendment to the title of the competent authority;
(2) Removal of the requirement to deliver insurance stickers;
(3) Amendment to the premium to be returned by the insurance company when an insurance policy is withdrawn, which will only deduct "any expenses needed to ensure the soundness of this insurance"; and
(4) Replacement of the term "cripple" with "disabled".
Reported by: David Tsai / Cindy Chien
Cross-Strait Relations with Mainland
4. Amendments to Measures Governing Investment Permit to the People of Mainland Area and Its Rulings
On 30 December 2020, the Ministry of Economic Affairs (MOEA) announced the amendments to the Regulations for Approval on Investment in Taiwan by People of Mainland Area (Regulation) and its rulings. We summarize below:
(1) Amendment to the calculation measure for shareholding: Any person(s) of Mainland China having, individually or collectively, over than 30% of shares in any level of upper shareholders in a third area company(ies), such shareholder will be deemed a Mainland China investor.
(2) Amendment to the standard for controlling power: Expanding the company's decision-making organization from "board of directors or similar organizations" to "board of directors or other organizations that may determine on the company's operating policy" (including other decision-making organizations under the board of directors).
(3) Expanding the definition of investment to include the Mainland China investor’s shareholding or contribution in a company, a sole proprietorship, partnership, limited partnership in Taiwan area. The definition of investment further include the Mainland China investor's control in a sole proprietorship, partnership, limited partnership, non-listed, non-OTC listed or non-emerging company by agreement or other measures, and mergers and acquisitions of non-listed, non-OTC listed, or non-emerging company(ies), and merger or acquisition of business or assets of non-listed, non-OTC listed, or non-emerging company(ies) by a third area company controlled by the Mainland China investor.
(4) The competent authority shall restrict the Communist Party of China, Government of the Mainland China, Mainland China's military, the legal person, organization or institution invested by the political agent, or their third area company, from investment in Taiwan.
Reported by: Mike Lu / Will Chen
5. Amendment to Regulation on Investment or Technical Cooperation Permission in Mainland and Principles for Reviewing Investment or Technical Cooperation in the Mainland China
On 30 December 2020, the MOEA announced the amendments to the Regulation on Investment or Technical Cooperation Permission in Mainland and Principles for Reviewing Investment or Technical Cooperation in the Mainland China. We summarize below:
(1) Expanding the definition of technical cooperation to include any Taiwan person's direct or indirect transfer or license of expertise technical, patent, trademark or economic rights of copyright to any person(s) of Mainland China.
(2) Providing the competent authority's review measure for application of technical cooperation in Mainland China, including review on the impact on the core competitiveness of domestic industries and infringement of other manufacturers' intellectual property rights for an application for technology license or transfer.
Reported by: Mike Lu / Will Chen
Company Act
6. Interpretation for the Redemption of Shares
The MOEA issued a ruling on 25 December 2020 that a company may issue “redeemable special shares” under Article 158 of the Company Act. As to common shares, except for the circumstances as provided in Paragraph 1, Article 167 of the Company Act, a company may not redeem or buy back any of its outstanding common shares, nor accept any of them as a security for pledge.
Reported by: Mike Lu / Ted Lee
Food Safety
7. Punishment Principle for Violation of Article 45.1 of Act Governing Food Safety and Sanitation relating to Untrue, Overstated or Misleading Labeling
On 29 December 2020, the Ministry of Health and Welfare promulgated the Punishment Principle for Violation of Article 45 of Act Governing Food Safety and Sanitation relating to Untrue, Overstated or Misleading Labeling (Punishment Principle). We summarize below:
(1) The administrative fine for the first violation is New Taiwan Dollar (NTD)40,000; for the second violation is NTD60,000; for the third violation is NTD100,000; for the fourth violation is NTD 150,000 for the fifth violation or subsequent violations is NTD200,000 or more. However, the fine amount above shall be aggravated if any statutory matters set out in the Punishment Principle apply.
(2) The below factors shall also be considered together with the above to determine the amount of administrative fine:
(a) The education and intelligence of the offender；
(b) The experience and seniority the offender in the relevant business; and
(c) The offender’s attitude and actions to prevent the occurrence of risks or expansion of damage after the violation.
Reported by: Kang-Shen Liu / Rady Lee
Taxation
8. Amendment to Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing
On 28 December 2020, the Ministry of Finance (MOF) announced the amendment to Regulations Governing Assessment of Profit-Seeking Enterprise Income Tax on Non-Arm's-Length Transfer Pricing (Regulation), which we summarize below:
(1) To amend the definition of "intangible assets".
(2) Where the comparable uncontrolled transactions data (including internal and external) is highly comparable with the controlled transactions, the single most reliable Arm’s-length transaction result of the controlled transactions can be determined based on a single comparable uncontrolled transaction.
(3) To set forth the evaluation of comparable situations or transactions shall be based on the actual economic effects of the transaction; and the factors that should be considered when analyzing the comparable degree of intangible assets.
(4) To add the analysis steps of risk assessment and the judgment methods of whether to assume risks and manage risks, and to provide different rewards according to the degree of risk control.
(5) To add the most appropriate arm’s-length method shall be determined in accordance with the assumptions to determine the applicability of income method set forth in Article 19-1, Paragraph 2 of the Regulation.
(6) To add the factors for consideration when evaluating the comparability analysis of intangible asset transactions.
(7) To include the “income method” as one of the arm’s-length transaction methods for intangible asset transactions.
(8) To add the regulations for the evaluation of intangible assets when using the income method and the applicable factors of the evaluation method.
(9) To amend the content that should be included in the transfer pricing reports and the country-by-country reports.
(10) To amend the penalties patterns of transfer pricing adjustment cases.
Reported by: Stacy Lo / Nora Wu
9. Business Tax of Credit Card Handling Fee Income
On 29 December 2020, the MOF announced a ruling, which we summarize below:
(1) The credit card handling fee income of all debit cards payment business charged by banks engaging in credit card business is sales amounts not related exclusively to their core business. Therefore, the business tax rate under Article 10 of the Value-added and Non-value-added Business Tax Act shall apply.
(2) Cases finalized and conclusive before the release of this ruling will not be affected.
Reported by: Stacy Lo / Amy Su
Insurance
10. Reward and Disciplinary Measures for Insurance Solicitors
On 28 December 2020, the Insurance Agency Association of the Republic of China forwarded the ruling issued by the Financial Supervisory Commission (FSC) to announce that for the reward and disciplinary measures with respect to the solicitation activities of insurance solicitors according to Article 18 of the Regulations Governing the Supervision of Insurance Solicitors shall be limited to the scope under Article 19 thereof. If an insurance company has other management requirements for the insurance solicitors based on its practical operation, the company shall separately set up relevant internal regulations in accordance with other laws or regulations, or specify in the employment contract with the insurance solicitors. An insurance company shall also set up a committee or related organization with at least one insurance solicitor included to deal with the violation of Article 19 of the Regulations Governing the Supervision of Insurance Solicitors.
Reported by: David Tsai / Lily Huang
Offshore Structured Products
11. Amendment to the Rulings in Relation to "Regulations Governing Offshore Structured Products"
On 25 December 2020, the FSC issued two rulings in relation to the Regulations Governing Offshore Structured Products to respectively amend the format and content of the report to be prepared by the issuer or master agent/trustee or sub-distributor on each business day and within 10 days after the end of each month are announced.
Reported by: Jeffery Liu / Doris Huang
Labor
12. Amendment to the list of Foreign Special Professional Who Possesses Special Expertise in Science and Technology
The Ministry of Science and Technology (MOST) announced the amendment to the list of Foreign Special Professional Who Possesses Special Expertise in Science and Technology (List) on 25 December 2020. The amendment added senior executives or core technical staff of R&D teams with experience of successfully making overseas startups become listing companies or being acquired by other listing companies and senior management of venture capital companies or funds which have actual achievements on investing overseas startups or MOST-related programs in the List.
Reported by: David Tsai / Alex Li
Securities
13. Qualified buyers under the foreign bond agency business
On 28 December 2020, the FSC announced a ruling to (1) list the qualified buyers under foreign bond agency business in a positive way, and (2) clearly include the postal institution handling postal remittance and saving business as one of the qualified buyers.
Reported by: Jeffery Liu / Mindy Liao
|
2021-01-07
