Taxation
1.Amendments to Value-added and Non-value-added Business Tax Act
On 15 July 2024, the Legislative Yuan passed the amendment to the “Value-added and Non-value-added Business Tax Act”. We summarize below:
(1)To add that when business entities issues electronic uniform invoices, they shall upload the uniform invoices and relevant necessary information to the E-Invoice Platform of the Ministry of Finance within the time limit.
(2)To add that when a business entity fail to upload the uniform invoices and relevant necessary information within the time limit based on facts, an administrative fine of no less than NT$1,500 and no more than NT$15,000 may be imposed. In case of a failure to make a correction within the time limit, the administrative fine may be imposed for each violation.
Reported by: Paul Hsu / Julia Kuo
2.Amendment to Income Tax Act
On 15 July 2024, the Legislative Yuan passed the amendment to the “Income Tax Act”. We summarize below:
(1)To amend the scope of tax withholder, from natural persons including the responsible person of an enterprise or the head of the unit responsible for tax withholding of an organization or institution, to the enterprise, organization and institution, etc., itself;
(2)To add that, the time limit for a non-resident’s payment of taxes withheld and the submission and issuance of certificate may be extended for 5 days if encountering 3 consecutive days of national holidays; and
(3)To amend the amount of fine for the failure to submit or issue the certificate truthfully within time limit, from a fixed rate of the amount of payment or tax amount withheld, to a range within the specified maximum and minimum amount.
Reported by: Paul Hsu / Zoe Chen
Artificial Intelligence
3.Draft Artificial Intelligence Fundamental Act
On 15 July 2024, the National Science and Technology Council announced the draft “Artificial Intelligence Fundamental Act” for public consultation. We summarize below:
(1)When promoting the research, development and application of artificial intelligence, the government should follow the following fundamental principles:
a.Sustainable development and well-being;
b.Human autonomy;
c.Privacy protection and data governance;
d.Information security and safety;
e.Transparency and explainability;
f.Fairness and non-discrimination;
g.Accountability.
(2)The government should promote incentives for the artificial intelligence industry development.
(3)The government should establish a mechanism for the opening, sharing and reuse of data.
(4)The Ministry of Digital Affairs should promote a risk classification framework for artificial intelligence that is in line with international standards.
Reported by: Stacy Lo / Julia Kuo
Insurance
4.Amendments to Directions for Collecting Premiums Authorized by Insurance Enterprises
On 12 July 2024, the Financial Supervision Commission (FSC) announced the amendment to the “Directions for Collecting Premiums Authorized by Insurance Enterprises”. The amendment adds a provision that a life insurance enterprise shall not authorize an authorized collector to collect premiums paid in cash on its behalf.
Reported by: David Tsai / Sean Tsai
5.Amendments to Self-Regulatory Guidelines for Information Security Protection in the Insurance Industry
In response to the increasing demands and intensity of information security protection in financial institutions, and in alignment with the policies the FSC, among others, including “Financial Cybersecurity Action Plan 2.0”, the Non-Life Insurance Association of the Republic of China revised its self-regulatory guidelines on July 18 2024. We summarize below:
(1)The member company is required to review their information operations-related regulations annually and clearly define roles for identifying information assets and segregating personnel responsibilities.
(2)Guidelines for operational environment management personnel are established to ensure that the permission of usage granted to the personnel is based on the minimum privilege and need-to-know basis.
(3)For all information systems, guidelines related to the scope and operational procedure shall be established based on its scale and structure. In addition, the remote insurance, mobile services and e-commerce information systems, which fall under the first category of computer systems shall follow operational procedures similar to those of core information systems.
(4)In the event of a significant information security incident, it shall be handled by the member company in accordance with the “Guidelines of Scope for Reporting Procedures and Other Requirements for Reporting Major Incidents in the Insurance Industry.”
(5)A system related to the warning against the analysis of abnormal log is newly added to immediately response to the information security incident.
Reported by: David Tsai / Scott Chuang
6.Amendment to Directions for Operation Outsourcing by Insurance Enterprises
On 30 July 2024, the FSC announced the amendment to the “Directions for Operation Outsourcing by Insurance Enterprises”. We summarize below:
(1)The provision related to the dispatch of consumer publications is removed as it does not fall under the business scope governed by the laws/regulations of insurance.
(2)In consideration of the cost of insurance operation, the requirement for the insurance company to jointly engage an independent third party with information expertise to audit the same cloud service provider has been relaxed to include other insurance industries and financial institutions.
Reported by: David Tsai / Joe Liao
7.Amendments to Regulations Governing the Implementation of Internal Control and Audit System and Business Solicitation System of Insurance Agent Companies and Insurance Broker Companies
On 22 July 2024, the FSC announced the amendment to the “Regulations Governing the Implementation of Internal Control and Audit System and Business Solicitation System of Insurance Agent Companies and Insurance Broker Companies”. We summarize below:
((1)To amend the threshold of annual operating income from NT$300 million (or more) to NT$200 million (or more) for the insurance agent company and insurance broker company which is obligated to establish internal control and audit system as well as business solicitation system and procedures.
(2)To cope with the adjustment to the signature mechanism, the control mechanism of solicitation documents is amended based on the mechanism of inspection/approval instead of signature.
(3)To add that those who have the qualification of insurance agent or insurance broker and have actually performed agency or brokerage work for more than two years are qualified to serve as auditors.
Reported by: David Tsai / Julia Kuo
Securities
8.Amendment to Taiwan Stock Exchange Corporation Procedures for Review of Call (Put) Warrant Listings and Taiwan Stock Exchange Corporation Guidelines Governing the Particulars to be Recorded in a Public Offering Prospectus for Call (Put) Warrants
On 17 July 2024, the Taiwan Stock Exchange Corporation announced the amendment to the “Taiwan Stock Exchange Corporation Procedures for Review of Call (Put) Warrant Listings” and “Taiwan Stock Exchange Corporation Guidelines Governing the Particulars to be Recorded in a Public Offering Prospectus for Call (Put) Warrants”. The major amendment is to remove the relevant requirements for legal opinion and associated checklist from lawyers for each application for issuance of warrant, so as to reduce the cost of issuers for such application.
Reported by: Jeffrey Liu / Winnie Su
Factory Management Act
9.Factory Management Act
The President announced the amendments to Articles 28-14 and 31 of the “Factory Management Act” on 24 May 2024, which came into force on 1 August 2024. The amendment is mainly to increase the fine amount to penalize a factory’s failure to report the dangerous articles by the time required or failure to report correctly. In addition, the competent authority may impose a fine on the factory without ordering the factory to correct its incompliance in advance.
Reported by: Kangshen Liu / Paul Hsu
| Editors: Mike Lu (Partner) Stacy Lo (Partner) Jeffrey Liu (Partner) Kang-Shen Liu (Partner) David Tsai (Partner) Angela Lin (Partner) Paul Hsu (Partner) | Counselors: Echo Yeh Sue Su Jolene Wang (Lexcel Partners IP) |