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Taxation
1. Amendments to Securities Transaction Tax Act
On 21 December 2021, the Legislative Yuan passed the amendments to Article 2-2 of the “Securities Transaction Tax Act”, which extends the day trade securities transaction tax rate of 1.5‰ to apply till 31 December 2024.
Reported by: Stacy Lo / Rady Lee
2. Amendment to "Guidelines for Determination of Income from Sources in the Republic of China in Accordance with Article 8 of the Income Tax Act and Directions on Levying of Income Tax on Cross-Border Electronic Services Transactions
On 16 December 2021, the Ministry of Finance announced the amendment to the "Guidelines for Determination of Income from Sources in the Republic of China in Accordance with Article 8 of the Income Tax Act" (Guidelines) and the "Directions on Levying of Income Tax on Cross-Border Electronic Services Transactions" (Directions). We summarize below：
(1) In respect of the Guidelines, to add that tax withholders may apply to the tax authority for assessment of applicable Net Profit Ratio by providing the required documents upon payment to foreign profit-seeking enterprises for income sourced from the R.O.C.; and the "Directions regarding Tax Withholder's Application of Net Profit Ratio for Payment of Remuneration or Business Profits of Foreign Profit-seeking Enterprises was promulgated to regulate the relevant application procedure.
(2) In respect of the Directions, to provide the required documents for the tax withholders' application of applicable Net Profit Ratio and Domestic Profit Contribution Ratio.
Reported by: Stacy Lo / Henry Ku
Labor
3. Amendment to Employment Insurance Act
On 24 December 2021, the Legislative Yuan has passed the three readings of the amendment to Article 19-2 of Employment Insurance Act allowing the parents may claim for the parental leave allowance at the same time.
Reported by: David Tsai / Lily Huang
Anti-Money Laundering
4. Draft Amendment to Money Laundering Control Act
The Ministry of Justice announced the draft Amendment to Money Laundering Control Act on 28 December 2021 for public consultation. We summarize below:
(1) To revise the definition of money laundering as disguise type, hindrance or hazard type and isolation type.
(2) To add the migrant smuggling as the specific crime under the Act.
(3) To regulate the virtual asset related activity under the anti-money laundering regime, and to add the definition of virtual asset and virtual asset service provider.
(4) Financial institutions and designated non-financial businesses or professions shall acquire and retain sufficient, correct and up-to-date information of the trustor, trustee and beneficiary of the trust, and any other individual who effectively and ultimately controls the trust and trust agent.
(5) The countries or regions with high risks of money laundering and terrorism financing are subject to the announcements issued by international anti-money laundering organizations.
(6) To use NT$100 million as the criterion for the severity of the money laundering crime, and to separate the penalty of money laundering crime from the predicate crimes.
(7) Criminal punishment shall be imposed on the persons suspicious of money laundering and failing to explain, unable to reasonably explain or making false explanation.
(8) Criminal penalties shall be imposed on persons providing financial accounts to others without justifiable reasons.
(9) To increase the penalty for juristic persons to lesson more than ten times of the penalty for individuals.
(10) The property or property interests involved in money laundering shall be confiscated regardless of whether the property or property interests belong to the person committing money laundering.
Reported by: Stacy Lo / Hsiyen Hsu
5. Amendment to Regulations Governing Anti-Money Laundering of Financial Institutions and Regulations Governing Internal Audit and Internal Control System of Anti-Money Laundering and Countering Terrorism Financing of Banking Business and Other Financial Institutions Designated by the Financial Supervisory Commission
The Financial Supervisory Commission (FSC) announced the amendment to the "Regulations Governing Anti-Money Laundering of Financial Institutions" and "Regulations Governing Internal Audit and Internal Control System of Anti-Money Laundering and Countering Terrorism Financing of Banking Business and Other Financial Institutions Designated by the Financial Supervisory Commission" on 14 and 15 December 2021 respectively. We summarize below:
(1) To include migrant workers remittance companies into other financial institutions designated by the FSC, revise the definition of electronic payment accounts and users, and add the definition of stored value cards;
(2) To amend the term of "electronic stored value cards" to "stored value cards"; and
(3) To add that the migrant workers remittance companies shall annually arrange orientation and on- job training on Anti-Money Laundering and Countering Terrorism Financing.
Reported by: Stacy Lo / Nora Hsu
Labor
6. Amendment to Employment Stabilization Plan
On 27 December 2021, the Ministry of Labor announced the amendment to the Employment Stabilization Plan t to extend the plan to 31 June 2022.
Reported by: David Tsai / Alex Li
FinTech
7. Guideline for Information Sharing among Financial Institutions
On 23 December 2021, the FSC announced the Guidelines for Information Sharing among Financial Institutions (Guidelines) regarding the types of information that can be shared among the financial institutions. We summarize below:
(1) Unless otherwise provided by laws and regulations, the information sharing among the financial institutions shall be proceeded according to the Guidelines and the Personal Information Protection Act (PIPA).
(2) The financial institutions shall establish the internal control regulations which shall be passed by the board meeting or the committee as applicable. The financial institutions shall also disclose corresponding privacy policy on their websites.
(3) The financial institutions under the Guidelines are categorized to three types: Group of Financial Holding Company (Type One), Financial Group of Non-Financial Holding Company (Type Two), and the financial institutions other than the two types above (Type Three).
(4) To share the information for the purpose of risk identification and risk control, Type One and Type Two of the financial institutions must receive clients’ consents and protect the clients’ rights and interests. The financial institutions may also establish database to conduct the risk control.
(5) To share the information for the purpose of facilitating clients’ operation or business cooperation, Type One, Type Two and Type Three of financial institutions must receive clients’ consents, protect clients’ rights and interests, and establish the relationship of business cooperation with each other.
(6) Financial institutions which have already conducted information sharing under other laws and the PIPA may continue to share, and shall complete the related internal control regulations under the Guidelines. The board meeting or the committee as applicable shall pass such internal control regulations.
(7) For securities and futures enterprises under Type Three, they must apply with the FSC for approval to conduct the information sharing for the first time. Application rules of which will be announced by the FSC separately.
Reported by: Jeffrey Liu / Lia Wang
Securities
8. Amendment to the Ruling in Relation to Paragraph 1, Article 5 and Paragraph 1, Article 6 of Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities
On 15 December 2021, the FSC issued a ruling (Jin-Guan-Zheng-Quan-Zi-1100372038) to further include closed end fund as one of the beneficiary certificates set forth in the Paragraph 1, Article 6 of the Regulations Governing Securities Firms Accepting Orders to Trade Foreign Securities.
Reported by: Jeffrey Liu / Amy Su
SIT Funds
9. Amendment to Regulations Governing Securities Investment Trust Funds
On 28 December 2021, the FSC announced the amendment to the "Regulations Governing Securities Investment Trust Funds". Please refer to our Lexgroup Newsletter (Issue No. 378) dated 22 October 2021, item 6 for details.
Reported by: Jeffery Liu / Eliza Lee
SITE/SICE
10. Amendment to Article 68 of Corporate Governance Best-Practice Principles for SITEs/SICEs
On 23 December 2021, the Securities Investment Trust and Consulting Association of the R.O.C (SITCA) announced the amendment to Article 68 of the Corporate Governance Best-Practice Principles for SITEs/SICEs to add paragraph 3, which require that the companies shall at least disclose the engagement with investment objectives and participation in shareholders' meeting within the stewardship report.
Reported by: Jeffrey Liu / Henry Ku
Financial Consumer Protection Act
11. Draft amendment to a certain amount of Article 29 of Financial Consumer Protection Act
The FSC announced the draft amendment to a certain amount of Article 29 of the Financial Consumer Protection Act on 27 December 2021. We summarize below:
Taking into account the development of cross-industry operations and Fintech, the current structure of classification of industry and financial products or services shall be amended. The certain amount of financial products or services listed on the front is 1.2 million dollar, as to the certain amount of the rest of the financial service or products provided by the industry is 120 thousand dollar.
Reported by: Jeffrey Liu / Nora Hsu
Corporate Governance
12. Amendment to Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies
On 25 December 2021, the Taipei Exchange announced an amendment to the Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies. We summarize below：
(1) Directors are advisable not to trade stocks in 30 days before the annual report and 15 days before the quarterly report.
(2) Directors' remuneration related matters of TWSE/TPEx Listed Companies are advisable to be reported issues at regular shareholders' meeting.
(3) Number of female directors are advisable to be 1/3 or more in the board
(4) Number of seats for independent directors are advisable to no less than 1/3 in the board and whose terms of office shall not be more than three consecutive terms.
Reported by: Mike Lu / Henry Ku
Company Act
13. Amendment to Regulations Governing Items to be Contained in Shareholders' Meeting Handbooks and Compliance Matters of Public Companies
The FSC announced an amendment to the Regulations Governing Items to be Contained in Shareholders' Meeting Handbooks and Compliance Matters of Public Companies on 16 December 2021. We summarize below:
In order for investors to be informed of contents of the shareholders' meeting agenda of listed companies, for companies whose paid-in capital at the end of the most recent fiscal year reaching NT$10 billion or the shareholders' roster of the latest fiscal year with shares held by foreigner and Chinese investors reaching 30% in an aggregate, the companies shall submit the electronic files of hand book and supplementary materials of the shareholders meeting to the reporting website designated by the FSC 30 days before the shareholders' meeting.
Reported by: Mike Lu / Nora Hsu
Insurance
14. Directions for Insurance Companies to Engage in Microinsurance Business
On 16 December 2021, the FSC announced the amendment to Item 2 of the Directions for Insurance Companies to Engage in Microinsurance Business to amend the maximum gross annual consolidated income for the economically disadvantaged, which shall not exceed the aggregated amount of the individual income tax exemption, standard deduction and special deduction for employment income announced by the Ministry of Finance for the fiscal year.
Reported by: David Tsai / Hazel Wei
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2022-01-07
