|
Business Mergers and Acquisitions Act
1. Amendment to Business Mergers and Acquisitions Act
On 24 May 2022, the Legislative Yuan passed its third reading of the amendment to the Business Mergers and Acquisitions Act and the effective date is subject to an announcement of the president. The major amendments are as below:
(1) Enhancing the protection of shareholders' rights and interests: Important contents of directors' interest in the subject proposal and reason why he/she supports or holds against the merger and acquisition proposal shall be indicated in the shareholders' meeting agenda (Article 5); and shareholders voting against the merger and acquisition proposal will be entitled to exercise appraisal right (Article 12).
(2) Expanding the application of whale-minnow merger: In a merger and acquisition where the share consideration issued by the acquiring company does not exceed 20% of its total issued voting shares, or the total consideration paid by the acquiring company does not exceed 20% of its net worth, no resolution by the shareholders' meeting is required and only a board approval is sufficient (Articles 18, 29 and 36); and
(3) Tax incentives: amortization of intangible assets (Article 40-1) and deferral of income tax (Article 44-1).
For more details of the amendment, please refer to our Alert Sheet on 2 June 2022.
Reported by: Mike Lu / Angela Lin
Taxation
2. Income Tax Provisions on Red List Transactions of Resale of Pre-sale Houses by Taxpayers
The Ministry of Finance issued a ruling on 26 May 2022 in respect of income tax provisions on red list transactions of resale of pre-sale house by taxpayers. We summarize below:
(1) Individuals and profit-seeking enterprises paying a deposit or similar to obtain a written agreement (commonly referred to as a red list) under the Equalization of Land Rights Act before entering into a pre-sale houses contract, is a contractual act based on the pre-sale houses relationship.
(2) From 1 July 2021, the resale of the red list to a third party, which is a transaction of a pre-sale house and the share of land associated with the house under Paragraph 2, Article 4-4 of the Income Tax Act, shall be subject to income tax in accordance with the Income Tax Act as amended on 28 April 2021.
(3) The fine imposed by the competent authority on individuals and profit-seeking enterprises for resale of red lists in violation of Paragraph 6, Article 47-3 of the Equalization of Land Rights Act shall not be deducted from the taxable income when calculating the income tax.
(4) Individuals and profit-seeking enterprises that re-sell red lists after 1 July 2021 and before the issuing date of this ruling, and voluntarily file the return and make the tax payment with interests before 30 June 2022 in accordance with the Tax Collection Act, are exempt from penalties under the same Act.
Reported by: Stacy Lo/ Ali Tsai
3. Amendment to Enforcement Rules of Tax Collection Act
The Ministry of Finance announced on 23 May 2022 the amendment to the “Enforcement Rules of the Tax Collection Act”. We summarize below:
(1) If the amendment to the reference table for fine amount and multiples on tax violation, misconduct, and fraud cases is prejudicial to the taxpayer, it does not apply to cases that have not been assessed at the time of announcement of the amendment.
(2) The business taxes in priority over general claims by creditors is expanded to business taxes assessed on auctions or sales by the courts, Administrative Enforcement Agency of Ministry of Justice, and their branches.
(3) Paragraph 1, Article 48 of the Tax Collection Act provides that “tax incentives” shall be terminated and recovered if material act of tax evasion was committed. The “tax incentives” refer to "the tax incentives provided by laws other than tax laws which share the same tax item with that of tax evasion ", provided that if the tax reductions stipulated in tax laws are the same with the tax incentives under laws other than tax laws, such tax reductions are included; the “tax incentives” mentioned in Paragraph 2 of the same Article refer to "tax incentives provided by laws other than tax laws".
Reported by: Stacy Lo / Sunny Lan
Intellectual Property
4. Passing the third reading of Amendment to Copyright Act
On 27 May 2022, the Legislative Yuan passed its third reading of the amendment to the Copyright Act. We summarize below:
(1) Legally established schools and their teachers may, where necessary for the purpose of teaching in schools, publicly broadcast and publicly transmit copyrighted works of others to conduct distance teaching with a reasonable technological measure to restrict access for non-enrolled users.
(2) Legally established schools or educational institutions and their teachers (the exploiters) may, where necessary for the purpose of meeting educational needs, publicly broadcast and publicly transmit copyrighted works of others to conduct non-profit distance teaching, regarding which the exploiters shall notify the economic rights holders and pay the compensation for use.
(3) For the purpose of using in distance teaching, the pedagogical texts may be publicly transmitted as E-Schoolbags to meet educational needs, regarding which the exploiters shall notify the economic rights holders and pay the compensation for use.
(4) The National Library may digitally reproduce its collections and provide readers with online reading in the National Library.
Reported by: Jolene Wang / Alex Miao
Medical Accident
5. Medical Accident Prevention and Dispute Handling Act
The Legislative Yuan passed the "Medical Accident Prevention and Dispute Handling Act" on 30 May 2022 under which the medical accident shall be dealt with in according to the following procedures in the future:
(1) Communication and care: The medical institution shall set up a medical accident care group to help and communicate with the patients after the accident.
(2) Dispute mediation: The local department of health shall set up a medical dispute mediation committee to mediate the dispute before the initiation of the civil or criminal litigation. On the other hand, the central authority shall delegate or set up foundation(s) as a neutral third party to provide medical professional consultation and analysis of medical disputes.
(3) Accident prevention: The hospital shall set up an internal patient safety control system. The medical institution shall proactively analyze the cause(s) of major medical accident(s) and notify the competent authority of the same.
Reported by: David Tsai / Eric Han
Labor
6. Amendment to Regulations Governing the Determination Criteria and Inspection of No Harm to Mental and Physical Health in Article 45 of the Labor Standards Act
On 31 May 2022, the Ministry of Labor announced the amendment to the "Regulations Governing the Determination Criteria and Inspection of No Harm to Mental and Physical Health in Article 45 of the Labor Standards Act", which specifically provides that the employer shall apply for insurance for the workers who are eligible for the insurances under the Labor Insurance Act, Labor Occupational Accident Insurance and Protection Act, or the National Health Insurance Act.
Reported by: David Tsai / Paul Hsu
Corporate Governance
7. Draft Amendment to Regulations Governing Procedure for Board of Directors Meetings of Public Companies
On 12 May 2022, the Financial Supervisory Commission(FSC) announced the draft amendment to the Regulations Governing Procedures for Board Meetings of Public Companies. The draft amendment proposes to add that election and discharge of the chairperson as one of matters that shall be submitted for the board discussion under Article 7; and matters requiring the board resolution must be specified in the meeting notice and an extemporary motion in the board meeting is not permitted.
Reported by: Mike Lu / Henry Ku
Securities
8. Draft amendment to Regulations Governing the Offering and Issuance of Securities by Securities Issuers, Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies, Regulations Governing Information to be Published in Annual Reports of Public Companies and Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses
On 18 May 2022, theFSC announced the draft amendments to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, Regulations Governing Share Repurchase by Exchange-Listed and OTC-Listed Companies, Regulations Governing Information to be Published in Annual Reports of Public Companies and Regulations Governing Information to be Published in Public Offering and Issuance Prospectuses. We summarize below:
(1) The issue period of employee stock option and restricted stock award has been extended from 1 year to 2 years starting from the date of receipt of the notice of effective registration.
(2) To specify the items to be considered and the review procedures for the issuance of employee reward instruments.
(3) To specify that the disclosure information of employee stock option and restricted stock award shall include the amount of effective registration and the number of shares still available for issuance.
Reported by: Jeffrey Liu / Amy Su
Fair Treatment
9. Amendment to Principles for Fair Treatment to Financial Customers
On 12 May 2022, the FSC issued a ruling to amend the Principles for Fair Treatment to Financial Customers. We summarize the major changes below:
(1) Removal of "Principle of Sales in Complex and High-Risk Products" and reallocate it to other principles, as applicable.
(2) Addition of Principle 9 (Principle of Friendly Customer Service) and Principle 10 (Principle of Ethical Operation).
Reported by: Jeffrey Liu / Jason Su
Finance
10. Amendment to Appendix 3 of Conditions to Be Met and Documents to Be Submitted by Commercial Banks for Investment in Other Enterprises
On 24 May 2022, the FSC announced the amendment to Appendix 3 of the "Conditions to Be Met and Documents to Be Submitted by Commercial Banks for Investment in Other Enterprises", which took effect on the same day. The amendment is to be in line with the amendment to the definition of major sanctions under the “FSC's Public Announcement of Major Sanctions Measures for Violation of Financial Laws and Regulations”, and to add proviso of the same paragraph to exclude applicants subject to major sanctions but promoting the sound development of financial market, whose violations have been specifically improved, or who have proposed improvement measures recognized by the authorities.
Reported by: Stacy Lo / Linda Chu
|
2022-06-07
