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Labor
1. Amendment to Act for Settlement of Labor-Management Disputes
On 28 April 2021, the President announced the amendment to the Act for Settlement of Labor-Management Disputes, which sets one to three members as executive members for Board for Decision on the Unfair Labor Practices, and adds relevant regulations that the decision on the Unfair Labor Practice shall be publicly announced.
Reported by: David Tsai / Lily Huang
2. Labor Occupational Accident Insurance and Protection Act
On 30 April 2021, the President announced the Labor Occupational Accident Insurance and Protection Act, the effective date will be further provided by the Executive Yuan. As the Act will have substantial impact on the employer/employees and apply to more workers, workers encountering occupational accident or damage ("Worker") will have better protection in the future. We summarize the Act below:
(1) The insured: The insured ("Insured") includes any Worker (including foreign Worker) (i) employed by the employer who or which has license, has been registered under laws or has tax registration, (ii) employed by any government agency or school, (iii) retained as an apprentice or any student under the business-education cooperation project, or (iv) enrolled into any professional labor union or fishermen association, or under the training of a vocational training institution, all of whom are mandatorily required to join the occupational accident and damage insurance ("Insurance"). Other Workers employed by the employer designated by the central competent authority, employers actually providing labor service and designated seamen may also be the Insured of the Insurance.
(2) Term of Insurance: The Insurance shall take effective upon the date reporting to the duty until the date of termination. For any Worker insured by any labor union, fishermen association or vocational training institution, the Insurance shall take effective on the date when the Worker joins the union or association or the training begins, or the next day of the notice from the insured unit, until the date when the Worker withdraws from the union or association or the insured unit's notice to cease the Insurance.
(3) Insurance premium rate: The Insurance premium shall be calculated based on the Insured's monthly Insurance salary at the statutory rate. If the reported Insurance salary is not true, the insurer may directly make adjustment to the Insurance salary. The ranks/levels of the monthly Insurance salary and the rates will be further announced. The ranks/levels of the monthly Insurance salary are set with the minimum basic salary (currently, NTD24,000 or USD857) as the floor, and according to the press reports, NTD72,800 (approximately USD2,600) is set as the maximum at this stage, and the Insurance premium for each of the employees to be borne by the employer may be between NTD 50 to 153 (approximately USD1.79 to 5.45)).
(4) Insurance premium payment: The Insurance premium shall be 100% borne by the employer. The Insured through any labor union or association shall bear 60%, while the government will subsidize 40%; and the Insured (Class A) through any fishermen association shall bear %20, while the government will subsidize 80%. For the Insurance premium to be borne by the insured unit, if its assets are insufficient to pay the premium, its responsible person shall be jointly and several liable for the payment. The claim over the insurance premium and penalty shall be settled prior to the normal credits of the insured units.
(5) Insurance payment: The claims are divided into payment for medical care, injury or sicknesses, permanent disability, decease and missing, and the payment for the same event shall not be entitled to other social insurance (such as labor or farmer insurance). Upon occurrence of an Insurance event, the Insured or his/her beneficiary or any person paying the funeral expenses can claim for payment, subject to the legal requirements. The Insurance payment shall be based on the average monthly Insurance salary of the last six (6) months prior to the month when the event arises.
The statute of limitation for claim of Insurance payment will expire if not exercised within five (5) years. The Act also provides payment terms and standards for various Insurance payments. For instance, the payment for medical care is divided into the payment for outpatient and inpatient treatments; payment for injury or sicknesses will be settled at 70% of the monthly Insurance salary, payable every half month, up to two (2) years; payment for permanent disability, sever disability and partial disability shall be made at 70%, 50% and 20% of the monthly Insurance salary respectively; payment for death benefits shall be claimed by the family dependents, and those who pay for funeral expenses can claim for funeral allowance.
(6) Obligation to provide information: The insurer or central competent authority may request the Insured, beneficiary, hospital institutions, doctors or the relevant organization or individual to provide the information or materials necessary for assessment or review of the insurance disputes, and such addressees shall not circumvent, impede or decline to respond or provide false statement or evident.
(7) Account exclusive for payment: The right to claim for Insurance payment cannot be transferred, offset, seized or served as collaterals. The insured or the beneficiary may open an exclusive account at a financial institution for annuity payout. The deposit in the account may not be offset, seized or served as collaterals or subject to seizure for compulsory execution.
(8) Termination: Unless otherwise provided under the Act (such as cease of business operation or substantial losses of operation reported to the competent authority or incompetent to the work after assessment), an employer cannot terminate the Worker suffering the occupational accident or damage by advance notice. The Worker on the other hand can terminate the employment under certain circumstances, and the employer shall pay severance or pension according to law.
(9) Offset of employer’s compensation liabilities: The employer shall be jointly and severally liable with the contractor for compensation toward the Worker employed by the contractor but suffers occupational accident. If the employer has compensated the Insured for the accident according to law, after the Insured receives the Insurance payment, the employer may allege to deduct the insurance payment from the compensation and request the Insured to return such payment.
Reported by: David Tsai / Paul Hsu
Administrative Execution Act
3. Amendment to the Administrative Execution Act
On 29 April 2021, the Executive Yuan passed the draft amendment to the Administrative Execution Act. It supplements the relevant provisions including the administrative execution during night or on holidays, announcement of obligor’s information and the reduction of the auction price for real estate etc. Please refer to the Alert Sheet from Lexcel Partner issued by our firm on 13 May 2021 for details.
Reported by: David Tsai / Lia Wang
Criminal Code
4. Draft Amendment to Criminal Code
The Executive Yuan announced the draft amendment to Articles 87 and 98 of the Criminal Code on 4 March, 2021, which provide that, among others, the custody and protection treatment can be extended by approval of courts upon prosecutors’ application. Each extension can be up to three years at a time, and the number of extensions is not limited.
Reported by: David Tsai / Alex Li
Taxation
5. Draft ”Situations of house and land held for no more than 5 years are transferred because of a job transfer, involuntary separation from employment or any other involuntary cause under Item 5, Subparagraph 1, Paragraph 3, Article 14-4 of Income Tax Act”
On 30 April 2021, the Ministry of Finance announced the draft ”Situations of house and land held for no more than 5 years are transferred because of a job transfer, involuntary separation from employment or any other involuntary cause under Item 5, Subparagraph 1, Paragraph 3, Article 14-4 of Income Tax Act” for public consultation. This draft is in accordance with Article 14-4 of the Income Tax Act amended on 28 April, 2021. Individual who meets the following 6 situations where he/she transfers the house and land held for no more than 5 years because of job transfer, involuntary separation from employment or any other involuntary cause, the applicable income tax rate is 20%:
(1) An individual or his/her spouse purchases a house and land nearby the workplace, completes household registration and lives there, does not use the house and land for lease, business operation, or professional practice, and thereafter has to leave the original workplace and sell the house and land because of job transfer, involuntary separation from employment in accordance with Paragraph 3, Article 11 of the Employment Insurance Act or terminate the labor contract in accordance with Article 24 of the Act for Protecting Worker of Occupational Accidents;
(2) An individual who sells the part of the land which has been boundary encroached before his obtaining to the owner of the house in accordance with Paragraph 2, Article 796 of the Civil Code.
(3) An individual who is unable to pay off debts (including tax debts), and transfers the ownership of his house and land because of compulsory execution.
(4) An individual who has to sell his/her house and land to pay the medical expense because himself/herself, his/her spouse, spouse’s parents, minor children or adult children who are incapable of earning the living suffer from a major illness or injury form a major accident.
(5) An individual who obtains ordinary protection order in accordance with the Domestic Violence Prevention Act and sells his/her own house and land in order to avoid the counterparty.
(6) An individual who shares the ownership of the house or land with others, and the co-owner sells the house or land in accordance with Article 34-1 of the Land Act without his/her consent, which results in the transaction of his/her own share.
Reported by: Stacy Lo / Amy Su
6. Draft “house and land that have been held for no more than 5 years are transferred because of involuntary cause as stipulated in Item 4, Subparagraph 1, Paragraph 2, Article 24-5 of Income Tax Act”
On 4 May 2021, the Ministry of Finance announced the draft “house and land that have been held for no more than 5 years are transferred because of involuntary cause as stipulated in Item 4, Subparagraph 1, Paragraph 2, Article 24-5 of Income Tax Act” for public consultation. This draft is in accordance with the Article 24-5 of the Income Tax Act amended on 28 April, 2021. A Profit-seeking enterprise which meets the following 4 situations where house and land held for no more than 5 years are transferred because of involuntary cause, the applicable income tax rate is 20%:
(1) A profit-seeking enterprise which sells the part of the land which has been boundary encroached before its obtaining to the owner of the house and land in accordance with Paragraph 2, Article 796 of the Civil Code.
(2) A profit-seeking enterprise which is unable to pay off debts (including tax debts), and transfers the ownership of its house and land because of compulsory execution.
(3) A profit-seeking enterprise which shares the ownership of the house or land with others, and the co-owner sells the house or land in accordance with Article 34-1 of the Land Act without its consent, which results in the transaction of its own share.
(4) House and land acquired by banks through foreclosure of mortgage and shall be disposed within 4 years from the date of acquisition in accordance with Article 67 of the Banking Act.
Reported by: Stacy Lo / Amy Su
7. Extension of period for filling tax returns and payment for specific taxation during May and July 2021
On 7 and 12 May 2021, the Ministry of Finance (MOF) announced that due to the outbreak of Covid-19, the period for filling the tax returns and payment between May to July 2021 is extended according to Article 10 of the Tax collection Act. We summarize below:
(1) Income Tax – for all taxpayers, the period for filling the individual and business income tax returns and payment for 2021 is extended to 30 June 2021.
(2) Business Tax, Tobacco and Alcohol Tax, Community Tax, Specifically Selected Goods and Services Tax and House Tax –
(a) Qualified obligor – taxpayer or withholder itself, its responsible person, accountant, bookkeeper, bookkeeping and tax return filing agent who is subject to isolation or quarantine within the period for filling the tax returns and payment.
(b) The period for filling the tax returns and payment is extended to the date designated by the MOF.
(c) The qualified tax obligor is not required to apply for the extension in advance, but needs to file the tax returns and payment with the document evidencing isolation or quarantine treatment to the tax authority during the extension period.
(3) Taxpayers unable to pay the tax within the payment period due to Covid-19 could apply to postpone the payment or payment by installments during the payment period (including the extension period) according to Article 26 of Tax collection Act.
Reported by: Stacy Lo / Rady Lee
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2021-05-21
