Tax
1.Amendment to Securities Transaction Tax Act
On 2 January 2025, the President announced the amendment to the Securities Transaction Tax Act. We summarize below:
(1) The applicability period of the securities transaction tax rate of 1.5‰ for day trading of stocks settled by cash is extended to 31 December 2027; and
(2) Provisions regarding the service of documents by deposit of documents and public announcement for securities transaction tax payment notices are deleted. Relevant procedures for service of documents shall now apply the Administrative Procedure Act.
Reported by: Alex Li / Zoe Chen
Labor
2.Attendance of work and payment of salary during the holiday of 2025 Chinese New Year
On 10 January 2025, the Ministry of Labor announced a press release to state that the Chinese New Year’s Eve (i.e. 28 January) and Chinese New Year (i.e. from 29 January to 31 January) are national holidays. If the employer obtains the employee’s consent to work during the national holidays mentioned above, the employer shall give the employee double salary. If the employee works in the rest days, the salary of that day shall be 1.34 time of the employee’s hourly rate for the first 2 working hours, and 1.67 time of the employee’s hourly rate for the rest 6 working hours.
In addition, the original working day (i.e. 27 January, Monday) and the original rest day (i.e. 8 February, Saturday) have been exchanged by the work calendar of the government agency (“Work Calendar”) so as to create a consecutive holiday of 9 days. If the employer would like to adopt the same Work Calendar as government agency, the employer may implement the 8-week flexible working hours to adjust the working days after an approval is given by the union or labor-management conference (if no union).
For other points, please also refer to our “Alert Sheet from Lexcel Partners – Attendance of work and payment of salary during the holiday of Chinese New Year” issued on 16 January 2025.
Reported by: David Tsai / Paul Hsu
Tax
3.Amendments to Tobacco and Alcohol Tax Act, Land Tax Act, and Vehicle License Tax Act
On 7 January 2025, the Legislative Yuan passed the third reading of amendments to the “Tobacco and Alcohol Tax Act”, “Land Tax Act”, and “Vehicle License Tax Act”. We summarize below:
(1) The penalty multiplier for taxpayers who evade tobacco and alcohol taxes, as well as the tobacco health and welfare surcharges, is amended from “1 to 3 times” to “up to 3 times.” The special provisions for imposing late payment penalties on overdue tobacco and alcohol taxes, as well as the tobacco health and welfare surcharges are deleted. Relevant late payment penalties now apply the Tax Collection Act.
(2) In cases where land is sold again without completing the transfer of ownership registration, the penalty amount, originally set at “2%” of the current value of the subsequent sale and transfer, is amended to ” 2% or less.”
(3) For violations in relation to using temporary or trial licenses, failing to obtain licenses for newly purchased vehicles, reselling license or providing licenses to others, the penalty multipliers have been amended from “1 time”, “1 time”, and “2 times” to “1 time or less”, “1 time or less”, and “2 times or less”, respectively.
Reported by: Alex Li / Julia Kuo
Electricity Act
4.Draft Amendment to Electricity Act
On 9 January 2025, the Executive Yuan passed the draft amendment to the Electricity Act, which is subject to review by the Legislative Yuan. We summarize below:
(1) To add the definition of “Specific Electricity Supply Enterprise”, which is included in “Electricity Enterprises.”
(2) To add the definition of “Energy Storage Equipment.”
(3) To remove the restriction that the customers of “Renewable Energy-Based Electricity Retailing Enterprises” are limited to “users” only.
(4) To remove the restrictions that Electricity Transmission and Distribution Enterprises may not concurrently engage in Electricity Generating Enterprise or Electricity Retailing Enterprise business, and may not have cross-shareholdings with each other. The separate accounting system shall be implemented and relevant penalties are added.
(5) To amend the requirement that Electricity Transmission and Distribution Enterprises shall upon approval by the electricity industry competent authority, “establish an open and transparent electricity trading platform after unbundling its generation and grid businesses” as an optional provision
(6) To add provisions that the electricity industry competent authority may review the operational model and effectiveness of the electricity trading platform as necessary, may establish an independent trading entity or require platform operators to enhance neutral operations, with related penalties provisions added.
(7) To add that Specific Electricity Supply Enterprises supplying power through energy storage equipment or other facilities shall apply for approval and registration with the electricity industry competent authority before installation and to apply for an electricity license after completing the installation.
(8) To include Specific Electricity Supply Enterprises within the scope of those required to obtain an electricity license before commencing operations.
(9) To add provisions requiring those participating in electricity trading platforms as specific electricity suppliers before the implementation of these amendments to obtain an electricity license within one year after the effective date of the amendments; otherwise, they will be prohibited from operating.
(10) To amend that Electricity Transmission and Distribution Enterprises and Public Electricity Retailing Utility shall not cease or suspend operations. The application and approval procedures for the suspension or cessation of operations are consolidated with those of other electricity enterprises and Specific Electricity Supply Enterprises are included.
(11) To include Specific Electricity Supply Enterprises within the scope of those required to report to the competent authority in the event of emergencies and to add related penalties.
(12) To remove the prohibition that Public Electricity Retailing Utility and Renewable Energy-Based Electricity Retailing Enterprises shall not establish major power generation equipment and to amend related penalties.
Reported by: Stacy Lo / Joe Liao
Tax
5.Ruling Related to Act for Development of Small and Medium Enterprises
On 6 January 2025, the Ministry of Finance issued a ruling, which states that, in accordance with Paragraphs 1 and 2 of Article 36-2 of the Act for Development of Small and Medium Enterprises, the marked-up deduction amount, which is incurred from the salary cost for hiring additional domestic junior employees no more than 24 or not less than 65 years of age, as well as the wages increment for domestic junior employees, should be included in the basic income of a profit-seeking enterprise since 1 January 2024.
Reported by: Paul Hsu / Julia Kuo
Personal Data Protection Act
6.Draft Amendment to Personal Data Protection Act
On 20 December 2024, the Preparatory Office of the Personal Data Protection Commission announced the draft amendment to the Personal Data Protection Act for public consultation. We summarize below:
(1) To add provisions requiring the central and local governments to cooperate in implementing the requirements under this Act and allowing the convening of personal data protection policy advancement meetings on specific matters.
(2) To add provisions requiring government agencies or designated non-government agencies to appoint a personal data protection officer and personal data protection audit personnel, and to authorize the competent authority to establish relevant regulations.
(3) To add provisions requiring government agencies or non-government agencies to take contingency measures, preserve relevant records, and notify the competent authority in the event of personal data disclosure, destruction, or other incidents, and to authorize the competent authority to establish relevant regulations. Additionally, to remove the condition that notification to the data owners must be made only after confirming that the incident “violates the provisions of this Act” and the natures of the incident has been clarified.
(4) To amend the title of the person responsible for personal data file security maintenance to “personal data protection personnel,” and to authorize the competent authority to establish relevant regulations.
(5) To add supervision provisions for government agencies, including implementation of submission of personal data protection management measures, audits, rectification reports, on-site inspections, confidentiality obligations, deadlines for rectification, disciplinary actions for related personnel, and public disclosure of significant violations, among others.
(6) To amend the authority responsible for administrative inspections of non-government agencies to “the competent authority,” to adjust inspection methods, and to add obligations for relevant agencies to cooperate and assist.
(7) To add provisions for the selection and evaluation procedures of industries and non-government agencies with higher risks of personal data infringement, which is subject to administrative inspections in priority, and to authorize the competent authority to establish relevant regulations.
(8) To add penalties for non-government agencies which violate relevant obligations.
(9) To add provisions authorizing the competent authority to establish relevant reference guidelines.
(10) To add provisions stipulating that in case of objections to decisions or dispositions made by the competent authority under this Act, the provisions of administrative litigation procedures shall directly apply.
Reported by: Stacy Lo / Joe Liao
Climate Change
7.Draft Emission Sources Where Greenhouse Verification and Registration shall be Conducted
On 9 January 2025, the Ministry of Environment announced the draft “Emission Sources Where Greenhouse Verification and Registration shall be Conducted” for public consultation. We summarize below:
(1) Emission sources where greenhouse verification and registration shall be conducted under Paragraph 1, Article 21 of the Climate Change Response Act, include, among others, service industries, colleges and universities, medical institutions, transportation industries, and manufacturing industries with certain scale.
(2) Emission sources mentioned above are not subject to verification by a verification institution and shall complete the verification and registration of greenhouse gas of the previous year starting from 2026 onwards.
Reported by: Stacy Lo / Eva Chiu
Sustainable Economic
8.Announcement of Second Edition of the Guidelines for Identifying Sustainable Economic Activities
(1) On 2 January 2025, the Financial Supervisory Commission (FSC) announced the second edition of the “Guidelines for Identifying Sustainable Economic Activities”. We summarize below:
(a) The criteria for identifying sustainable economic activities are revised as (i) substantial contribution to any of the six environmental objectives; (ii) no significant harm to the six environmental objectives; and (iii) no significant harm to social protection.
(b) To expand the applicable industry scope: Increased to 5 industries with a total of 29 general economic activities. The Chinese language of “Enabling activities” is renamed and adjusted to 14 items, with reference standards provided.
(c) To modify the level classification of sustainability: The “Effort in Progress” and “Improvement in Progress” are merged into “Transformation in Progress.”
(d) To add the sustainability proportion for financial industry investments, financing, and financial products.
(2) Furthermore, the FSC announced the “Suggested Items to Be Covered in Transformation Plans” to assist enterprises in developing comprehensive and referenceable transformation plans.
Reported by: Stacy Lo / Eva Chiu
Financial
9.Draft Amendment to Regulations Governing Banks Conducting Financial Products and Services for High-Asset Customers
On 6 January 2025, the FSC announced the draft amendment to the Regulations Governing Banks Conducting Financial Products and Services for High-Asset Customers for public consultation. We summarize below:
(1) The term “in writing,” “signature,” or “signing” as referred to in these Regulations may be executed using electronic documents and electronic or digital signatures in accordance with the provisions of the Electronic Signatures Act.
(2) To expand the scope of sales targets for offshore structured products or structured bonds issued by designated exchange banks (or their overseas branches) and offshore banking units.
(3) To remove the qualification requirements related to the assets under management for wealth management services when banks apply to engage in high-asset customers wealth management services (Business).
(4) To add that the items of financial products and services applicable for high-asset customers, conducted by banks approved by the FSC to conduct the Business shall be separately approved by the FSC.
Reported by: Stacy Lo / Sunny Lan
Financials
10.Amendment to Regulations Governing Information to be Published in Annual Reports of Financial Holding Companies, Regulations Governing Information to be Published in Annual Reports of Banks, and Regulations Governing Information to be Published in Annual Reports of Bills Finance Companies
On 9 January 2025, the FSC announced the amendment to the “Regulations Governing Information to be Published in Annual Reports of Financial Holding Companies”, “Regulations Governing Information to be Published in Annual Reports of Banks” and “Regulations Governing Information to be Published in Annual Reports of Bills Finance Companies”. We summarize below:
(1) To simplify the information to be published in annual reports:
(a) To delete the company profile and financial status;
(b) To delete the organizational system, the methods of inquiry for the Corporate Governance Best-Practice Principles and relevant laws and regulations, sanctions imposed on the company or internal personnel and the summary of resignations and removal of personnel under the corporate governance report;
(c) To delete the shareholder structure, ownership distribution and information on market capitalization, net worth, earnings per share, dividends and related information for the past two years under the capital and shares section; and
(d) To delete the holding or disposal of the company’s shares by the company’s subsidiaries under the special disclosures.
(2) If the following information to be published has been announced on the website designated by the FSC, the information may be referenced in the annual report by providing an index for information inquiry, and the information announced on the website designated by the FSC shall be deemed as a part of the annual report:
(a) Internal control statement;
(b) CPA’s special audit report on internal control system;
(c) Transfer of equity and change of equity pledge by the directors, supervisors, managers and shareholders holding more than ten percent of the company’s shares;
(d) Implementation of the company’s capital utilization plan;
(e) Information related to the company’s affiliated enterprises; and
(f) Status of private placement of securities.
(3) If the board seats of any gender do not reach one-third of the total, the annual report shall disclose the reasons and the measures planned to enhance gender diversity among the board members.
Reported by: Stacy Lo / Zoe Chen
Trust
11.Draft Amendment to Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises
On 10 January 2025, the FSC announced the draft amendment to the “Regulations Governing the Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises” for public consultation. We summarize below:
(1) To stipulate the foreign bonds that trust enterprises may accept mandates from non-professional investors shall not include total loss absorbing capacity bonds (TLAC bonds);
(2) To stipulate that trust enterprises having invested in TLAC bonds prior to the amendment can only sell TLAC bonds based on the trustor’s instructions and shall not accept further mandates to invest in TLAC bonds; and
(3) To delete the provision that non-professional investors aged 70 or above are prohibited from being recommended for investment.
Reported by: Stacy Lo / Zoe Chen
Securities
12.Announcement by the Central Bank: The Removal of the Annual USD 50 Million Quota for Discretionary Foreign Currency Investments in Foreign Currency-Denominated Securities
On 27 December 2024, the Central Bank announced that, starting from 2025, the annual USD 50 million quota for discretionary foreign currency investments in foreign currency-denominated securities will be abolished.
Reported by: Jeffrey Liu / Winnie Su
SITE/SICE
13.Management of Collaboration Between Securities Investment Trust Enterprises, Master Agents, and Sales Agent with Internet Celebrities for Marketing
On 2 January 2025, the Securities Investment Trust and Consulting Association (SITCA) issued a ruling recapping that advertising posts created in collaboration between securities investment trust enterprises, master agents, sales agents, and internet celebrities must comply with the provisions of the Guidelines for Advertisements and Business Activities Performed by Members and Their Sales Agent of SITCA. Furthermore, if internet celebrities publish collaborative advertisements on other platforms, they must also adhere to the relevant disclosure requirements for embedded marketing.
Reported by: Jeffrey Liu / Eden Hsieh
14.Amendment to the FAQs on the Private Placement of Securities Investment Trust Funds
The FSC issued an official letter on 30 December 2024, amending the FAQs on the private placement of securities investment trust funds (FAQ). An additional guideline was introduced under Question 35 of the FAQ regarding the disclosure of private placement product information on the official websites of securities investment trust enterprises (SITEs). We summarize below:
(1) Scope of private placement products;
(2) A dedicated webpage must be established to distinguish private placement products from public offering products;
(3) The dedicated webpage shall include warning statements; and
(4) The dedicated webpage shall implement access control mechanisms for users, and the disclosed information on private placement products should be limited to the product’s Chinese and English name, place of registration, base currency, or other publicly available information.
Reported by: Jeffrey Liu / Jason Su
SITE/SICE
15.Amendment to Article 24 of the Regulations Governing the Public Offering of Securities Investment Trust Funds by Securities Investment Trust Enterprises
On 8 January 2025, the FSC announced the amendment to Article 24 of the “Regulations Governing the Public Offering of Securities Investment Trust Funds by Securities Investment Trust Enterprises,” which is to add that when a securities broker acts as a fund distributor and subscribes to a securities investment trust fund under the name of the investor, the subscription amount can be debited from the investor’s retained funds in the separate account ledger of the securities firm’s settlement account established under the Regulations Governing Securities Firms and transferred to the segregated fund account, without being subject to the restriction that subscription amounts must be remitted directly to the segregated fund account by the subscriber.
Reported by: Jeffrey Liu / Amy Su
Securities
16.Ruling Regarding Securities Firms to be engaged for Trading of Offshore Funds without the Nature of Securities Investment Trust Fund
On 8 January 2025, the FSC issued a ruling specifying that the limitation on 99 “high net worth juristic person investors” and “high-net-worth investors” engaging a securities firm for trading of offshore funds without the nature of securities investment trust fund (“non-SIT fund”) is calculated on a per offshore non-SIT fund basis.
Reported by: Jeffrey Liu / Eva Chiu
SITE/SICE
17.Amendment to Template for Internal Management System of Securities Investment Consulting Enterprises Operating Securities Investment Consulting Business
On 8 January 2025, the SITCA announced the amendments to Template for the Internal Management System of Securities Investment Consulting Enterprises Operating Securities Investment Consulting Business to reflect the most recent rulings or amendments. The major amendments include such as identity verification mechanisms, pre-employment training, insider trading prevention management, management of outsourced operations, and the use of video conferencing software.
Reported by: Jeffrey Liu / Eden Hsieh
Securities
18.Draft Amendments to Regulations Governing the Offering and Issuance of Securities by Securities Issuers
On 10 January 2025, the FSC announced the draft amendments to Regulations Governing the Offering and Issuance of Securities by Securities Issuers. The key point is to relax the restrictions on prohibiting holders of convertible (exchangeable) corporate bonds and corporate bonds with warrants from requesting conversion, exchange, or the exercise of warrant rights during the lock-up period of shareholder meetings or extraordinary shareholder meetings.
Reported by: Jeffrey Liu / Winnie Su
SITE/SICE
19.Amendment to Q&A of Questions and Explanations for Application in relation to Directions for Matters of SITE/SICE Outsourcing to Others
On 13 January 2025, the FSC announced the amendment to Question 4 of the Q&A of Questions and Explanations for Application in relation to “Directions for Matters of SITE/SICE Outsourcing to Others”. It is mainly to add a general explanation regarding the determination of materiality, and to further clarify that except for overseas investment sub-delegation of onshore funds and outsourcing of central dealing to group companies or affiliates, the outsourcing arrangement below may be considered “non-material” by the company: (1) outsourcing operations to its affiliated group or related companies (including cases where, under a group contract or requirement, operations are outsourced to external vendors selected by the group); or (2) outsourcing operations to business entities unrelated to the group but are regulated by the FSC, such as domestic banks entrusted with handling back-office account operations for onshore funds.
Reported by: Jeffrey Liu / Amy Su
Insurance
20.Amendment to Regulations Governing the Supervision of Insurance Solicitors
On 2 January 2025, the FSC announced to amend Paragraph 1, Article 19 of the “Regulations Governing the Supervision of Insurance Solicitors”. The amendment revised the disciplinary period for solicitors being suspended from solicitation activities by their employing insurance entities from “not less than three months but not more than one year” to “not more than one year”.
Reported by: David Tsai / Julia Kuo
| Editors: Mike Lu (Partner) Stacy Lo (Partner) Jeffrey Liu (Partner) Kang-Shen Liu (Partner) David Tsai (Partner) Angela Lin (Partner) Paul Hsu (Partner) Alex Li (Partner) | Counselors: Echo Yeh Sue Su Jolene Wang (Lexcel Partners IP Firm) |