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Company Act
1. Ruling on No Par Value Shares
On 9 April 2021, the Ministry of Economic Affairs (MOEA) issued a ruling to clarify that neither the public companies nor non-public companies issuing no par-value shares may convert the shares to par-value shares according to Paragraph 6 Article 156-1 of the Company Act. As such, no par-value shares of a non-public company issuing shall remain the same which cannot be converted to par-value shares when the shares are applied for public offering or for listing or TPEx trading in the future.
Reported by: Mike Lu / Lia Wang
Taxation
2. Draft amendment to Tax Collection Act
On 15 April 2021, the Executive Yuan passed the draft amendment to Tax Collection Act. We summarize below:
(1) Notice for assessment of tax for assessed cases can be delivered by public announcement
(2) Belated Surcharge shall be charged for every 3 days of delay (which is 2 days currently). The maximum of belated surcharge is decreased from 15% to 10% of the total delayed payment.
(3) The system of unexpired statute of limitations is newly adopted
(4) For tax cases not involving natural disasters, incidents, force majeure, or economic underprivileged groups, payment in installments with additional interest may be applied for.
(5) The application period for tax refund due to wrong tax payment is amended from 5 years or no period limitation to 10 years. Also, no claim shall be made for payments if taxpayers breach tax laws or other regulations or exactly know there is no obligation to pay tax.
(6) The proportion of the amount payable required for suspending the compulsory execution is decreased from 1/2 to 1/3.
(7) The maximum of criminal fine for tax evasion by improper methods is amended from NT$ 60,000 to NT$ 5 million, and tax evasion which results in NT$ 10 million tax evaded for individual tax or NT$ 50 million for business tax is subject the heavier punishment
(8) Where a profit-seeking enterprise fails to provide, obtain or reserve certificates as required by the law, the amount of fine is amended from "5%" to "up to 5%" of the total amount under the relevant certificates as verified and determined.
Reported by: Stacy Lo / Rady Lee
3. Regulations on Recognition of High-Risk Innovative Startups under Article 12 of Income Basic Tax Act
On 14 April 2021, the Ministry of Finance (MOF)and the MOEA jointly announced the Regulations on Recognition of High-Risk Innovative Startups under Article 12 of the Income Basic Tax Act (Regulation). The Income Basic Tax Act provides that where an individual's incomeis derived from the transaction of the stocks, certificates of entitlement to new shares, certificates of payment, and documents of title to shares issued or privately placed by qualified domestic high-risk innovative startups after 1 January 2021, such income may be excluded from the calculation of basic income. We summarize the key point to recognize the high-risk startup company below:
(1) A company limited by shares may apply for recognition as high-risk innovative startups with the central competent authority in charge of relevant enterprises within five (5) years from the date of establishment. The effective period is 2 years from the date of recognition, which is extendable, provided that the effective period shall not be beyond five years from the date of establishment.
(2) To be recognized, the startups shall have the innovative and developing technology, creativity, or business model, and can provide solutions or demand creation to the target market, and the products or services shall have market potential.
(3) The below company limited by shares could be deemed as the high-risk innovative startups without the approval:
(a) A company limited by shares listed on the Go Incubation Board for Startup and Acceleration Firms with an approval, Innovation and Creativity Opinion Letter or recommendation per Taipei Exchange Regulations Governing the Go Incubation Board for Startup and Acceleration Firms; or
(b) An approved high-risk innovative startup under the Statute for Industrial Innovation.
Reported by: Stacy Lo/ Hsiyen Hsu
4. United Kingdom Added as a Country for Automatic Exchange of Financial Account Information for Tax Purpose
On 16 April 2021, the MOF announced that from this year, Taiwan and United Kingdom will conduct the automatic exchange of financial account information for tax purpose according to the "Agreement Between the Taipei Representative Office in the United Kingdom and the British Trade and Cultural Office, Taipei for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income and Capital Gains".
The MOF further advised that the financial institution in Taiwan shall newly report the financial account information held or controlled by the tax residence of United Kingdom this June.
Reported by: Stacy Lo / Will Chen
Financial
5. Draft amendment to Trust Law
On 22 April 2021, the Executive Yuan passed the draft amendment to the Trust Law. We summarize below:
(1) To provide the type of property for establishing a charitable trust.
(2) The trustee shall propose a property utilization plan to the central competent authority along with the Ministry of Finance for approval where the property for establishing a charitable trust contains non-cash property over a certain amount, or a charitable trust accepts donation in the form of non-cash property over a certain amount.
(3) To regulate the documents to be provided by a trustee when applying for establishment of the charitable trust and matters to be included in the trust deed and the similar.
(4) To provide the minimum ratio of the annual expense for charitable trust conducting trust business, and the obligations and method of the trustee to manage and utilize the trust property.
(5) To provide the accounting principles of charitable trust and the retention period for the accounting certificates and books and records. The financial statements of charitable trust whose property meet certain threshold shall be audited by CPA.
(6) To require information disclosure system for charitable trusts, and specify trust supervisor's obligations to avoid conflicts of interests, duties and negative qualifications, and supervisor being a non-paid position.
(7) To require charitable trusts meeting certain scale to set up a consulting committee and its function, and specify the obligations of the committee members to avoid conflicts of interest, the ratio of professionals among the members and the committee members being non-paid positions.
(8) To provide that after trust relation is terminated according to the trust deeds or the similar, the ownership of the trust property shall be limited to the charitable legal person or charitable trust supervised by the same central competent authority or governments, and the legal effects when the ownership of the trust property belongs to natural persons or profit-seeking legal persons or organizations.
Reported by: Stacy Lo / Hazel Wei
SIT Funds
6. Announcement that the Electronic Reporting Platform for Securities Investment Trust Funds Monthly Report has been Officially Launched
On 16 April 2021, to simplify the reporting procedures of securities investment trust fund’s (SIT fund) monthly report and for the purpose of energy saving as well as carbon reduction, the Securities Investment Trust and Consulting Association announced launch of "Electronic Reporting Platform for Securities Investment Trust Funds Monthly Report", which will be adopted from June 2021 for the monthly report of May 2021.
Reported by: Jeffrey Liu / Eliza Lee
Medical Device
7. Regulation of Establishment and Management of Medical Devices’ Source and Flow Data
On 20 April 2021, the Ministry of Health and Welfare (MOHW) announced the “Regulation of Establishment and Management of Medical Devices’ Source and Flow Data” (Regulations), which became effective as of May 1, 2021. The Regulations are summarized below:
(1) To define the scope and methods for an owner or a registrant of medical device permission, and a firm selling medical devices to establish and maintain the data regarding products’ source and flow;
(2) To define the scope and methods for a medical institution to establish and maintain the data regardingproducts’ sources and patients’ information with respect to the medical devices as used;
(3) To set time limits and methods for submitting a report on medical devices’ source and flow;
(4) To specify the contents of product identification information;
(5) To require the product identification information to be replaced by a Unique Device Identifier (UDI) for a medical device that is required to be labelled by a Unique Device Identifier (UDI) code in accordance with the above mentioned Item (3); and
(6) To set a period of the maintenance for the data on medical devices’ source and flow.
Reported by: Jolene Wang / Yenpu Chang
8. Enforcement Rules of Medical Devices Act
On 26 April 2021, the MOHW announced the “Enforcement Rules of Medical Devices Act” (Rules), which became effective as of May 1, 2021. The Rules are summarized below:
(1) To provide the conditions where it is not deemed as an advertisement for a medical device, and the requirements for a health education advocacy;
(2) To define the terms “Foreign objects that affect product quality are mixed or packed”, “manufacturing, packaging, labeling, or final inspection and release”, and “repair” mentioned in the Medical Devices Act;
(3) To provide the provisions and requirements for registration of a medical device firm;
(4) To define the scope of vendors who shall employ medical device technicians as stipulated in the Medical Devices Act;
(5) To specify, for the competent authority, the scope and method of the disclosure of relevant information as submitted by medical device firms for its registration or its application for a medical device permission;
(6) To define "the smallest packaging unit for sale" mentioned in the Medical Devices Act, and to provide the methods and contents of the labels, instructions or packaging of medical devices;
(7) Regarding “Essential Medical Devices”, to provide the content for submission of a general report by a medical device firm, and the method and contents of a report to be initiatively submitted, and the correction and prevention measures to be taken by a medical device firm;
(8) To specify the documents to be submitted by a medical device firm for applying for a medical device advertisement, the contents to be required in the advertisement, the contents which are not allowed to be included in the advertisement, and the extension of the period of the approval.
(9) To provide the procedures for reporting violations with respect to medical devices, rewards and protection measures for whistleblowers.
Reported by: Jolene Wang / Yenpu Chang
9. Regulations for Governing Classification of Medical Device
On 26 April 2021, the MOHW announced the Regulations for Governing Classification of Medical Device (Regulations). We summarize below.
(1) Themedical device shall be classified according to its application category in terms of its function, purpose, use method and working principle.
(2) The medical device is classified into three levels from low-risk to high-risk.
(3) To provide items for classification of the medical device, and classification and determination principles applicable in unique scenarios.
(4) For the medical device not included in the items for classification of the medical device in the table attached to the Regulation, the Regulation sets out the classification for such device.
Reported by: Kang-Shen Liu / Will Chen
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2021-05-07
