|
Constitution
1. Constitutional Court Judgement
On 27 October 2023, the Constitutional Court rendered Ref. No. 112-Shien-Pan-16 (Judgment) to opine that Paragraph 2, Article 56 of the Labor Standards Act (Provision) requests the employer to make up shortage of the estimated pension in one time does not violate the principle of proportionality and contradict the rationale of the Constitution to protect people's property rights if its implementation is still within a reasonable range and reasonable connection with the legitimate purpose of strengthening the protection of employee's right and interest for claiming the pension.
Reported by: David Tsai / Sean Tsai
Climate Change
2. Amendment to Enforcement Rules on Greenhouse Gas Reduction and Management Act," Renamed as "Enforcement Rules on Climate Change Response Act
On 27 October 2023, the Ministry of Environment (MOE) announced draft amendments to the Enforcement Rules on Greenhouse Gas Reduction and Management Act, which will be renamed as Enforcement Rules on Climate Change Response Act. The proposed additions and revisions include but not limited to:
(1) Addition of the responsibilities of the central competent authority, as well as the competent authorities of special municipalities and counties (cities);
(2) Addition of requirements for relevant central authorities to estimate greenhouse gas (GHG) emission trend, conduct scenario analysis, and assess their impact;
(3) Amendments to the schedule for reporting progress in achieving annual phased control targets;
(4) Relevant amendments to sector GHG reduction action plans and execution plans;
(5) Provisions concerning adaptation action plans and adaptation execution plans in areas vulnerable to climate change impacts;
(6) Amendments to the schedule for submitting national emissions statistics and the national GHG emissions inventory, along with the consolidation of content structure within the national inventory; and
(7) Addition of provisions for public participation, disclosure of relevant matters, and the schedule and methods for information disclosure.
Reported by: Jeffrey Liu / Jason Su
3. Regulations on Greenhouse Gas Voluntary Reduction Project
On 12 October 2023, the MOE promulgated the Regulations on Greenhouse Gas Voluntary Reduction Project, where fundamental principles for voluntary GHG reduction mechanisms are included (Regulations). The Regulations address several key areas, including application procedures, required documentation, and the registration process for voluntary reduction projects. Additionally, the Regulations detail the allocation of quotas for projects submitted jointly, compliance periods, principles for conducting additional analyses, and deadlines for project reviews, etc.
Furthermore, the Regulations provide details on GHG reduction methods as well as their designated certification or verification procedures, procedures for modifications and extensions of voluntary reduction projects, the establishment of quota accounts, and the allocation of reduction quotas. Also, the Regulations also specify the procedures and provisions for the application of reviewing or revising greenhouse gas reduction methods. Finally, the Regulaitons outline circumstances under which the central authority can revoke projects and cancel reduction quotas.
Reported by: Jeffrey Liu / Jason Su
4. Regulations over Greenhouse Gas Emissions Offset Programs
On 12 October 2023, the MOE announced the Regulations Governing Greenhouse Gas Emissions Offset Programs (Regulations). We summarize below:
(1) For enterprises, to add entities which are required to undergo GHG increase and offset, the regulations to be followed, the documents required for application, the schedule for submitting, and the relevant regulations on submitting the plan or its implementation results;
(2) For GHG, to add that the source for increasing and offsetting, the schedule, and the contents of the implementation report; and
(3) For the MOE, to add administrative requirmeents on the review and correction of plans or implementation results for the acceptance of GHG reduction benefits, as well as the review and correction of plans and implementation reports for the acceptance of GHG emission increase and offset.
Reported by: Jeffrey Liu / Winnie Su
Labor
5. Amendment to Table of Grades of Labor Insurance Salary and Insured Salary Category Chart of Labor Occupational Accident Insurance
On 16 October 2023, the Ministry of Labor (MOL) announced to amend the Table of Grades of Labor Insurance Salary and the Insured Salary Category Chart of Labor Occupational Accident Insurance. This amendment is to be in line with the adjustment of the basic wage. The monthly insured salary for the first level of the two tables/charts is amended to NTD27,470, and the levels of the monthly insured salary specified in the remarks column of the former table/chart are also adjusted accordingly.
Reported by: David Tsai / Sean Tsai
6. Amendment to "Type A Foreign Professional Personnel Employment Work Permit Application Form"
On 26 October 2023, the MOL announced the amendment to the "Type A Foreign Professional Personnel Employment Work Permit Application Form", which mainly specified in the application form that the business entity of "Six Core Strategic Industries" may also apply for employment of white-collar foreign workers for specific job categories. "Six Core Strategic Industries" include "information and digital industries", "cybersecurity industry", "precision health industry", "green and renewable energy industry", "national defense and strategic industries", and "strategic stockpile industries".
Reported by: David Tsai / Paul Hsu
SICE/SITE
7. Addition of anti-dilution clause of securities investment trust fund
On 20 October 2023, the Securities Investment Trust and Consulting Association (SITCA) issued a ruling to amend the template of trust deed of each type of securities investment trust funds (SITE Fund) except for open currency type of fund and ETF) and "SITCA SITEs Code of Manger". We summarize below:
(1) Amendments to template of trust deed of each type of SITE Fund: adding that manger may charge anti-dilution fee.
(2) Amendments to SITEs Code of Manger:
a. Manager shall establish the policy of anti-dilution fee of funds, and incorporate such policy in internal control system.
b. Manager of fund shall disclose the initiation threshold of anti-dilution fee of fund, rate of anti-dilution fee, adjusting mechanism, fee cap and related calculation method.
(3) The ruling also provides that:
a. The amendment will be implemented from 1 January 2025.
b. The new established SITE Fund shall state the mechanism of anti-dilution fee in the trust deed according to the template of trust deed. The established SITE Fund shall amend the trust deed where it decides to charge the anti-dilution fee. SITE Fund which does not have need of anti-dilution fee mechanism shall incorporate such mechanism in the trust deed where it amends the trust deed in the future.
c. SITE Fund shall disclose the anti-dilution fee mechanism in the prospectus where it has established such mechanism.
d. To protect the right of beneficiary of ETF, the mechanism of subscription fee and redemption fee of ETF shall be disclosed in the prospectus and the rate fluctuation shall be considered.
Reported by: Jeffrey Liu /Lia Wang
8. Ruling Regarding New Types of Business for SITE/SICE Under Article 3.3.3 and 4.3.3 of the Securities Investment Trust and Consulting Act
On 26 October 2023, the Financial Supervisory Commission (FSC) announced the ruling regarding the requirements to allow the business scope under the “other relevant business permitted by the FSC as stipulated in Article 3.3.3 and 4.3.3 of the Securities Investment Trust and Consulting Act, which have the same key points as the draft ruling. Please refer to Lexgroup Newsletter (Issue No. 422) for the summary.
Reported by: Jeffrey Liu / Amy Su
9. Draft Amendment to "Securities Investment Trust and Consulting Act"
On 12 October 2023, Executive Yuan announced the draft amendment to Securities Investment Trust and Consulting Act (Act), providing that "real estate investment trust enterprises" (REITs enterprise) may raise real estate investment trusts (REITs) through public offering or private placement. Unlike the current REITs issued under Real Estate Securitization Act, which adopts a trust structure with the trust enterprise concurrently acting as the custodian and the manager of the REITs, the draft amendment adopts "trust fund structure", which means that the REITs enterprise acts as the manger and the trust enterprise acts as the custodian. The new "trust fund structure" will co-exist with the current "trust structure", forming a double-track REITs system.
We summarize the draft amendment below:
(1) Defining the business scope of a REITs enterprise and the types of business it may operate, and stipulating that the operation of business shall be subject to prior approval of the competent authority.
(2) Adding definitions of relevant terms of REITs business, including REITs agreement, REITs fund, etc.
(3) Adding a new chapter to regulate REITs business, and stipulating that REITs shall not invest the housing under paragraph 1, Article 3 of the Housing Act except for projects of urban renewal and reconstruction of urban unsafe and old buildings.
(4) Stipulating that REITs enterprises may operate REITs business, and providing relevant regulations for REIT enterprises.
(5) As REITs funds mainly invest in real estate or its relevant rights rather than securities, the name of the Act is amended from "Securities Investment Trust and Consulting Act" to "Securities and Real Estate Investment Trust and Securities Investment Consulting Act".
Reported by: Jeffrey Liu /Lia Wang
Taxation
10. Amendments to Guidelines for the Determination of Income from Sources in the Republic of China in Accordance with Article 8 of the Income Tax Act
On 13 October 2023, the Ministry of Finance (MOF) announced the amendments to Point 15 of the "Guidelines for the Determination of Income from Sources in the Republic of China in Accordance with Article 8 of the Income Tax Act". The amendment extends the period for foreign profit-seeking enterprises to apply for cost deductions from 5 years to 10 years, which takes effect on the same day. On 13 October 2023, if such period has not exceeded 5 years according to the provisions in effect before the amendments, the new provisions apply; otherwise, the provisions before the amendments still apply.
Reported by: Stacy Lo / Cleo Lu
11. Draft Amendments to Regulations Governing Application of Income Calculation From Controlled Foreign Company for Individuals
On 30 October 2023, the MOF announced the draft amendments to "Regulations Governing Application of Income Calculation From Controlled Foreign Company for Individuals" for public consultation. We summarize below:
(1) When the trust property under a trust relationship is shares or capital of an affiliated enterprise in an offshore low-tax burden region or country, the settlor, trustee or beneficiary of this trust relationship constitutes the "related parties".
(2) The reference list of the low-tax burden regions announced by the MOF does not include the situations where the tax jurisdiction provides special tax rate or tax system for specific regions or specific type of enterprises.
(3) To amend the calculation method for the threshold to exempt from applying the provisions regarding controlled foreign companies; to amend the calculation method for the current-year earnings of controlled foreign companies, and to specify the conversion basis for exchange rate.
(4) Considering that the fair value of "financial instruments at fair value through profit or loss" (FVPL) fluctuates greatly in the short term and is beyond the control of the individual, it is stipulated that the individual may choose to add the relevant profits and losses back to the current-year earnings of controlled foreign company when the FVPL is disposed of or reclassified.
(5) To delete the requirement that the certificate of tax payment and related documents issued by the overseas tax authorities shall be authenticated by an embassy or consulate of the Republic of China, except where the income originates from Mainland China.
Reported by: Stacy Lo / Cleo Lu
12. Interpretation for Article 28 of the Land Act
On 16 October 2023, the MOF announced the interpretation ruling for Article 28 of the Land Act, which provides that in cases where a trust deed specifies the beneficiary of the trust property as the trustor and the trustor is dissolved due to a merger and the trustor and beneficiary are changed to the surviving company after the merger, if the merger falls under relevant provisions of the Business Mergers and Acquisitions Act, the land value increment tax that should be borne by the dissolved company may be deposited at the transferred land. The criteria for evaluation of the land's current transfer value declaration shall be handled in accordance with the "Guidelines for Enterprises or Financial Institutions Applying for Land Value Increment Tax Depositions due to Land Transfer under Mergers".
Reported by: Kangshen Liu/ Alex Li
Emerging Technologies
13. Announcement of "Guideline for the Online Lending Platforms Business"
On 19 October 2023, the FSC announced the "Guideline for the Online Lending Platforms Business”. We summarize below:
(1) P2P platform operators shall not provide services requiring special permits, such as accepting deposits or issuing securities, etc.
(2) P2P platform operators shall establish risk control mechanisms, such as real-name systems for borrowers and lenders, segregation of own funds and customer funds, and obtaining full performance guarantees from banks and other cash flow management and control principles.
(3) P2P platform operators shall establish measures to protect consumers, such as maintaining data security, setting up customer disputes handling mechanisms, and mechanisms to confirm the authenticity of claims.
Reported by: Stacy Lo/ Linda Chu
Financials
14. Amendment to "Operation Principle of the Asset Management Company Reinvested by the Financial Holding Company (Bank)"
On 5 October 2023, the FSC announced the amendment to the "Operation Principle of the Asset Management Company Reinvested by the Financial Holding Company (Bank)". We summarize below:
(1) To add that the asset management company (AMC) reinvested by the financial holding company (bank) may accept the engagement of the consultation and management consulting service of urban renewal or unsafe and old buildings reconstruction case, and may be the "parties entering agreements with the implementer on provision of needed funds" in the urban renew case led by the government, and assist with the development of public urban renewal.
(2) To provide that the amount advanced by AMC before the urban renewal plan is approved need not be calculated together with the similar case of banking subsidiaries or the financial holding company for the limitation under Article 72-2 of the Banking Act. However, the AMC shall track the actual purpose of the advanced fund. If the usage of the fund does not meet the fee item of the advance or the urban renewal plan is not approved by the competent authority, it shall still be calculated together for the aforementioned limitation under the Banking Act.
(3) To add that the financial holding company (bank) shall stipulate the AMC risk management indicator and limitation, and shall review the AMC operation status and business development every half an year, and stipulate relevant internal control system.
Reported by: Stacy Lo/ Henry Ku
|
2023-11-07
