Chapter One - General Provisions
Article 1
This Statute is enacted for the furtherance of industrial innovation, improvement of the
industrial environment, and enhancement of industrial competitiveness.
The term “industries” as used in this Statute shall refer to agricultural, industrial, and service
businesses.
Article 2
The terms used in this Statute are defined as follows:
- Company: A company incorporated in accordance with the provisions of the Company
Act.
- Limited partnership: A juridical person organized and registered pursuant to the Limited
Partnership Act.
- Enterprise: A sole proprietorship, partnership, limited partnership, company, or farmers
’ organization that has been registered in accordance with the law.
- Intangible assets: Assets that do not have physical form but have clearly discernible
content, have economic value, and can be directly controlled and disposed of without
interference from any other party.
Article 3
The term “competent authority” as used in this Statute refers to the Ministry of Economic
Affairs at the central government level, the special municipality government at the special
municipality level, and the county (city) government at the county (city) level.
Chapter Two - Basic Guidelines
Article 4
Within one year after the promulgation of this Statute, the Executive Yuan shall submit a
Framework for Industrial Development.
Each central authority in charge of relevant enterprises shall formulate its Industrial
Development Direction and Industrial Development Plan, which shall be submitted to the
Executive Yuan for approval, and shall be reviewed on a regular basis.
Each central authority in charge of relevant enterprises shall be responsible for promoting the
development of the industries subject to its jurisdiction.
Article 5
The special municipality and county (city) government may formulate local industrial
development strategies. When formulating such strategies, it shall consult with each central
authority in charge of relevant enterprises.
The central authorities in charge of relevant enterprises may provide incentives or grants for
the special municipality and county (city) government, to promote local industrial
development.
Article 6
(deleted)
Article 7
The central authorities in charge of relevant enterprises shall provide guidance or grants to
industries that are in difficulty, industries that are on the verge of being in difficulty,
traditional industries, and small- and medium-sized enterprises, to help them raise their
productivity and the quality of their products; and to help them establish industry-specific
country-of-origin marks to certify their products as made in Taiwan.
Article 8
The Executive Yuan shall undertake comprehensive industry surveys, assessment and
analysis with respect to the impact of the domestic and international economic circumstances
on the developments and innovations of domestic industries, and shall put forth industry and
innovation support plans, and review such plans periodically.
The industry and innovation support plans as referred to in the preceding Paragraph shall
include special guiding plans for supporting industries that are in difficulty, industries that
are on the verge of being in difficulty, traditional industries, and small- and medium-sized
enterprises.
Chapter Three - Grants or Guidance for Innovation Activities
Article 9
The central authorities in charge of relevant enterprises may provide grants, incentives or
guidance to promote the following matters:
1. Promotion of industrial innovation or R&D.
2. Provision of guidance relating to industrial technology and industrial upgrading.
3. Encouraging enterprises to establish innovation or R&D centers.
4. Assisting in the establishment of innovation or R&D institutions.
5. Promoting collaboration between industries, academic institutions, and research
institutions.
6. Encouraging enterprises to participate in workforce cultivation in schools.
7. Ensuring that there is an adequate supply of industrial human resources.
8. Helping local industries innovate.
9. Encouraging enterprises to use big data and open government data to develop and
innovate commercial applications or service models.
10. Other matters relating to the promotion of industrial innovation or R&D.
The regulations governing the recipients of the grants, incentives or guidance as referred to
in the preceding Paragraph, the eligibility criteria, the review standards, the application
procedures, the approving authority, and other related matters shall be prescribed by the
central authorities in charge of relevant enterprises.
Article 9-1
To promote state-owned enterprises’ innovation or research and development (R&D),
state-owned enterprises are required to have an R&D budget accounting for a certain
percentage of its total expenditure. If the R&D budget of a state-owned enterprise falls short
of such a percentage for two consecutive years, the central competent authority shall consult
the authority in charge of the state-owned enterprise about setting up a review and
adjustment mechanism for such state-owned enterprise.
The percentage of the R&D budget in the total expenditure under the preceding paragraph
shall be set by the central competent authority, taking into account the characteristics and
scales of the state-owned enterprises after consulting the authority in charge of each such
state-owned enterprise.
Unless otherwise provided in the treaties or agreements to which the ROC is a party, a
state-owned enterprise may apply a limited tendering procedure to a procurement project for
cooperation or commissioned study for innovation or R&D with a value reaching the
threshold for public announcement, without being subject to the restrictions under Article 19
or Paragraph 1 of Article 22 of the Government Procurement Act.
The ownership or the right to license others regarding the R&D results generated from the
cooperation or commissioned study for innovation or R&D projects conducted by
state-owned enterprises under the preceding paragraph may be conferred, in whole or in part,
on the entities doing such innovation or R&D, without being subject to the restrictions under
the National Property Act.
The R&D results that have been conferred on a public school, public institution
(organization) or public enterprise in accordance with the preceding Paragraph and their
safekeeping, use, profits, utilization and disposal shall not be subject to the restrictions under
Articles 11, 13, 14, 20, 25, 28, 29, 33, 35, 36, 56, 57, 58, 60, or 64 of the National Property
Act.
The ownership and utilization of the R&D results and the income generated therefrom as
referred to in Paragraph 1 and Paragraph 2 of this Article shall follow the principles of
fairness and effectiveness, taking into account the proportion and contribution of capital and
service, the nature of the R&D results, potential of application, social benefits, national
security, and impacts on the market. Regulations for the objectives, prerequisites, durations,
scopes, proportions (in whole or in part), registration, administration, allocation of profits,
recusal, and disclosure of relevant information shall be prescribed by the central competent
authority in consultation with the authority in charge of such state-owned enterprises.
Article 10
To promote industrial innovation, where a company or limited partnership has not violated
any environmental protection, labor safety and health, or food safety and sanitation laws in
the past three years, the company or limited partnership may select one of the following
incentives for crediting the funds invested by it in research and development against the
profit-seeking enterprise income tax payable by it. Once the company or limited partnership
selects an incentive, it cannot change its selection, and the creditable amount shall not exceed
30 percent of the profit-seeking enterprise income tax payable by it in the then-current year.
1. Up to fifteen percent of the R&D expenses may be credited against the profit-seeking
enterprise income tax payable by it in the then-current year.
2. Up to ten percent of the R&D expenses may be credited against the profit-seeking
enterprise income tax payable by it in each of the three years following the then-current year.
The regulations governing the scope of application of the investment credit under the
preceding Paragraph, the application deadline, the application procedure, the approval
authority, the implementation period, and the tax credit rate shall be prescribed by the central
competent authority in consultation with the Ministry of Finance.
Article 10-1
For the purpose of optimizing industrial structure and encouraging domestic industries to
upgrade to smart technology and make multiple innovations and applications, where a
company or limited partnership has not committed a severe violation of any environmental
protection, labor, or food safety or sanitation laws in the past three years, and has invested in
brand-new smart machines for its own use between January 1, 2019 and December 31, 2021,
or has invested in brand-new hardware, software, technology or technical services
introducing 5th-generation mobile networks between January 1, 2019 and December 31,
2022, by spending a total of NT$1 million up to NT$1 billion in the same taxable year, the
company or limited partnership may select one of the following incentives for crediting the
funds so invested by it against the profit-seeking enterprise income tax payable by it in the
taxable year. Once the company or limited partnership selects an incentive, it cannot change
its selection, and the creditable amount shall not exceed 30 percent of the profit-seeking
enterprise income tax payable by it in the then-current year.
- Up to five percent of the annual spending sum may be credited against the profit-seeking
enterprise income tax payable by it in the then current year.
- Up to three percent of the annual spending sum may be credited against the profit-seeking
Enterprise’s income tax payable by it in each of the three years from the then-current year.
Where a company or limited partnership is eligible for the investment credit under the
preceding paragraph and other types of investment credit in a year, the total amount
creditable in that year shall not exceed 50 percent of the profit-seeking enterprise income tax
payable by it in the then-current year, unless the then-current year is the final year for using
such credit and no cap is imposed on the creditable amount for that year according to other
laws.
The smart machines under Paragraph 1 mean machines utilizing intelligence technology
elements embodied in big data, artificial intelligence, the Internet of things, robots, lean
management, digital management, clicks and mortar, additive manufacturing or sensors, and
having the intelligent functions of production data visualization, fault prediction, accuracy
compensation, automatic parameter setting, automatic control, automatic scheduling,
application service software, flexible production, or mixed-model production.
The 5th-generation mobile networks under Paragraph 1 mean any systems using
technological elements, equipment (including equipment needed for testing) or vertical
application systems related to 5G mobile networks such as MF/HF communications, large
numbers of antenna arrays, network slicing, network virtualization, software-defined
networking and edge computing meeting the specifications of 3rd Generation Partnership
Project Release 15 and beyond to increase efficiency in production or provide smart services.
A company or limited partnership applying for eligibility for the investment credit under
Paragraph 1 shall submit an investment scheme capable of generating certain effects to the
central authority in charge of relevant enterprises for approval on a case-by-case basis. Each
company or limited partnership may apply for such investment credit only once in each
taxable year.
The regulations governing the scope of eligibility for the tax credit for investment in smart
machines or 5th-generation networks, investment schemes capable of generating certain
effects under the preceding five paragraphs, the application deadline, the application
procedure, the authority granting approval, the tax credit rate, calculation of the total
creditable amount in the then-current year, and other related matters shall be prescribed by
the central competent authority in consultation with the Ministry of Finance.
Article 11
(deleted)
Chapter Four - Circulation and Utilization of Intangible Assets
Article 12
To promote the circulation and utilization of the results of innovation or R&D, when
sponsoring, commissioning certain entities to do so, or funding innovation or R&D projects,
the central authorities in charge of relevant enterprises and the state-owned enterprises
subordinate to such authorities shall require the entities conducting such innovation or R&D
to devise the strategy for applying such innovation or R&D results for business operation,
substantively analyze the intellectual property rights, ensure the quality of the intellectual
property, give comprehensive protection to the results, and evaluate circulation and
utilization methods.
The circulation and utilization of the intellectual property under the preceding paragraph
shall be valuated by a legally qualified intangible asset valuation associate or by an
institution or person registered in accordance with Article 13, and the evaluation material
shall be recorded in the information service system designated by the central competent
authority.
The scope of application, promotion, administration measures, and other matters regarding
the innovation and R&D under Paragraph 1 of this Article shall be prescribed by the central
competent authority.
Article 12-1
To promote the circulation and application of the results of innovation or R&D, where an
R.O.C. individual, company or limited partnership receives revenue from assignment or
licensing of his/her/its intellectual property rights in his/her/its own R&D results, up to 200
percent of his/her/its R&D expenditures in the then current year may be deducted from the
amount of his/her/its taxable income up to the amount of the above revenue in that year, and
in the case of a company or limited partnership, the company or limited partnership may
choose between the tax credit against its R&D expenditures under this Paragraph and the tax
credit under Article 10.
Where an R.O.C. individual, company or limited partnership assigns, or grants a license to
use, his/her/its intellectual property rights in his/her/its own R&D results to a company, the
individual, company or limited partnership may opt to exclude the new shares acquired as
the consideration from his/her/its income taxable in the year such shares are acquired. Once
an option is made, it cannot be reversed. However, after the individual, company or limited
partnership has opted to exclude such new shares from his/her/its income taxable in the year
such shares are acquired, if the shares are transferred or are delivered by book-entry transfer
to an account with a securities depository enterprise, the entire transfer price, the market
price of the shares at the time of giving away or distribution as estate, or the market price of
the shares on the date of book-entry transfer less the expenses or costs incurred for
acquisition of the shares but not yet recognized, shall be included in the revenue for the year
of transfer or book-entry transfer and be declared for assessment of income tax.
The transfer under the preceding paragraph refers to purchase, sale, giving away, distribution
as estate, cancellation of shares as a result of capital reduction, corporate liquidation, or
change in ownership due to other causes.
Where an individual's income is calculated in accordance with Paragraph 1 or 2 hereof but is
not declared or proved by any documents, the sum of his/her costs and necessary expenses
shall be calculated at 30 percent of his/her revenue, the transfer price, the market price of the
shares at the time of giving away or distribution as estate, or the market price of the shares
on the date of book-entry transfer, and be deducted from the individual's taxable income.
The incentives under Paragraph 2 are available only if the company issuing shares submits
the required documents and information in the prescribed format to the central authority in
charge of relevant enterprises for certification in the year it accepts contributions in exchange
for its shares. A copy of the results of the certification shall also be delivered to the taxation
authority at the place where the company is located.
The regulations governing the scope of application of the R&D expenditures deductible from
the taxable income under Paragraph 1, the application deadline, the application procedure,
the approving authority, and other related matters shall be prescribed by the central
competent authority in consultation with the Ministry of Finance.
The scope of the intellectual property rights in the R&D results under Paragraphs 1 and 2,
and the format, the application procedure, and the formats of the required documents under
Paragraph 5 shall be prescribed by the central competent authority.
The regulations governing the procedure for deferred payment and assessment on shares
acquired with the transferred or licensed intellectual property rights in R&D results under
Paragraph 2, the documents to be submitted, and other related matters shall be prescribed by
the Ministry of Finance.
Article 12-2
Where a domestic academic or research institution assigns the intellectual property rights
resulting from its R&D achievements and conferred on it to a company or licenses the
company to use such rights in accordance with Paragraph 1, Article 6 of the Fundamental
Science and Technology Act, and acquires shares in the company, and distributes such shares
to the R.O.C. creators of such intellectual property rights in accordance with Paragraph 3,
Article 6 of the Fundamental Science and Technology Act, such an R.O.C. creator may opt to
exclude the new shares so acquired from his/her income taxable in the year such shares are
acquired. Once such option is made, it cannot be reversed. However, after the creator has
opted to exclude such new shares from his/her income taxable in the year such shares are
acquired, if the shares are transferred or are delivered by book-entry transfer to an account
with a securities depository enterprise, the entire transfer price, the market price of the shares
at the time of giving away or distribution as estate, or the market price of the shares on the
date of book-entry transfer shall be included in the creator’s salary for the year of transfer or
book-entry transfer and be declared for assessment of income tax in accordance with the
Income Tax Act.
The assignment under the preceding paragraph refers to purchase, sale, giving away,
distribution as estate, cancellation of shares as a result of capital reduction, corporate
liquidation, or change in ownership due to other causes.
Where a domestic academic or research institution distributes shares to R.O.C. creators in
accordance with Paragraph 1 of this Article and desires to be qualified for the incentive
under that paragraph, it shall submit duly formatted documents to the competent authority
specified in Paragraph 3, Article 6 of the Fundamental Science and Technology Act for
approval. A copy of the decision of the competent authority shall be served on the company
issuing the shares and the taxation authority at the place where the company is located.
The scope of the intellectual’s property rights derived from an academic or research
institution’s own R&D achievements and conferred on it in accordance with Paragraph 1,
Article 6 of the Fundamental Science and Technology Act, the rules for recognition of the
shares distributed to R.O.C. creators in accordance with Paragraph 3, Article 6 of said Act,
and the formats of the documents, the application procedure and the required documents
under the preceding paragraph shall be prescribed by the Ministry of Science and
Technology.
The procedure for declaring deferral of the income tax payable for the shares acquired by the
R.O.C. creators under Paragraph 1, the documents to be submitted, and other related matters
shall be prescribed by the Ministry of Finance..
Article 13
To assist enterprises in presenting the value of intangible assets derived from industrial
innovations, the central competent authorities shall invite the relevant agencies to attend to
the following matters:
1. Formulation and implementation of the standards for valuation services.
2. Establishment and management of valuation databases.
3. Cultivation and training of valuation associates, and setting up the mechanisms for
registering and managing valuation personnel and institutions.
4. Promotion of investment in or financing with intangible assets, securitization transactions,
insurance, completion guarantee, and other matters.
The central authority in charge of relevant industries may provide grants to certified or
registered intangible asset valuation associates and institutions for their valuation activities in
accordance with the law. The valuation associates and institutions receiving the grants shall
register the valuation data from their valuation projects subject to the grants on the
information service systems designated by the central competent authority.
The criteria for doing the valuation under Subparagraph 1, Paragraph 1, the application of
such criteria, the measures for promoting the creation and management of the databases
under Subparagraph 2, Paragraph 1, and other related matters shall be prescribed by the
central competent authority in consultation with the financial competent authorities and other
relevant agencies.
The scope and terms of registration of valuation associates and institutions under
Subparagraph 3, Paragraph 1, the method of applying for such registration, the matters to be
reviewed, such associates’ and institutions’ obligation to cooperate, the management
measures, and rules for revoking or invalidating registration, and other relevant matters shall
be prescribed by the central competent authority in consultation with the relevant agencies.
The matters to be promoted under Subparagraph 4, Paragraph 1 shall be prescribed by the
central competent authority in consultation with the financial competent authorities and other
relevant agencies.
Article 14
To encourage enterprises to make use of intellectual property to create operational benefits,
the central authorities in charge of relevant enterprises may assist
enterprises in the establishment of systems for the protection and management of intellectual
property.
Article 15
To improve the efficiency of the circulation and utilization of intellectual property, the
central authorities in charge of relevant enterprises may establish service mechanisms to
provide the following services:
- Establishment of information service systems to provide information relating to the
circulation of intellectual property.
- Provision of information relating to value addition and combination of intellectual
property.
- Implementation of activities relating to the promotion and marketing of intellectual
property.
4. Assistance in the development of the intellectual property services industry.
5. Providing guidance to industries on financing through the use of intellectual property.
6. Other applications of intellectual property.
Article 16
To encourage industry to develop brands, the central authorities in charge of relevant
enterprises may provide incentives, grants, or guidance for enterprises that take part in
international exhibitions and trade fairs, explore sales opportunities, or undertake brand
development with the aim of developing international brands and raising their international
image.
The regulations governing the recipients of the incentives, grants, or guidance as referred to
in the preceding Paragraph, the eligibility criteria, the review standards, the application
procedures, the approving authority, and other relevant matters shall be prescribed by the
central authorities in charge of relevant enterprises.
Chapter Five - Industrial Human Resource Development
Article 17
To strengthen the availability of the human resources required for industrial development,
the Executive Yuan shall designate an agency to establish mechanisms to coordinate the
development of industrial human resources and promote the following:
- Coordination with the central authorities in charge of relevant enterprises to conduct
surveys and projections on the supply and demand of human resources for key industries.
- Integration of supply and demand data relating to industrial human resources, and
formulation of industrial human resource development strategies.
- Coordination of matters relating to the promotion of industrial human resources
development.
- Promotion of planning for collaboration between industries, academic institutions,
research institutions, and vocational training institutions.
Article 18
Unless otherwise provided for by law, the central authorities in charge of relevant enterprises
may conduct the following matters in line with the needs of industrial development:
1. Formulating occupational competency standards for industrial human resources.
2. Promoting capability assessment of industrial human resources.
3. Promoting enterprises’ adoption of, private participation in, and international mutual
recognition of the matters under the preceding two subparagraphs.
The regulations governing the mechanisms for capability assessment of industrial human
resources, the quality standard, the issuance, extension, replacement, reissuance, revocation
and invalidation of professional capability assessment certificates, and recognition and
revocation of private capability assessment as referred to in Subparagraphs 2 and 3 of the
preceding paragraph, and other relevant matters shall be prescribed by the central authorities
in charge of relevant enterprises.
Article 19
To strengthen the resources for the cultivation of industrial human resources, the central
authorities in charge of relevant enterprises may provide guidance to support the
development of industrial human resources cultivation institutions or organizations, and to
introduce international human resources cultivation institutions into Taiwan.
Article 19-1
Where a company employee acquires stock-based employee compensation, the employee
may opt to exclude up to an annual total of NT$5 million worth of the acquired shares from
his/her annual taxable income as calculated at the market price prevailing in the year such
shares are acquired or the year of the day the acquired shares become disposable. Once an
option is made, it cannot be reversed. However, employee who has opted to exclude the
acquired shares from the annual taxable income in the year such shares are acquired, when
the shares are transferred or book-entry transferred to an account of a securities depository
enterprise, the entire transfer price, the market price of the shares at the time of giving away
or distribution as estate, or the market price of the shares on the date of book-entry transfer is
deemed the employee’s revenue for the year of transfer or book-entry transfer and must be
declared for assessment of income tax in accordance with the Income Tax Act.
Where a company employee has opted to apply the regulations in the preceding paragraph,
and has held the shares and continued to work at the company for two years or more from the
day the shares are acquired, when the shares are transferred or book-entry transferred to an
account of a securities depository enterprise, and the entire transfer price, the market price of
the shares at the time of giving away or distribution as estate, or the market price of the
shares on the date of book-entry transfer is higher than the market price on the day the shares
are transferred or become disposable, the market price on the day the shares are transferred
or become disposable shall be included in the revenue for the year of transfer or book-entry
transfer, and be declared for assessment of income tax in accordance with the Income Tax
Act. However, where a company employee has not declared for assessment of income tax, or
has been declared for assessment of income tax but cannot provide documentation proof of
the market price on the day the shares are transferred or become disposable, and the market
price on the day the shares become disposable cannot be obtained by the taxation authority,
the above provisions shall not apply.
Where an employee of the preceding paragraph has continued to work at the company for
two years or more, his years of service may be combined with the years of service from any
of the following companies.
1. A company over 50 percent of whose total issued voting shares or total capital is held by
the company granting the stock-based employee compensation.
2. A company that holds over 50 percent of the total issued voting shares or total capital of
the company granting the stock-based employee compensation.
A company employee as referred to in the preceding three paragraphs shall be a person
described in one of the following subparagraphs and not be the chairman of the board, a
director or a supervisor who is concurrently a managerial officer of the company.
1. An employee of the company that gives stock-based compensation to its employees.
2. In accordance with the Company Act or the Securities and Exchange Act, an employee of
a company over 50 percent of whose total issued voting shares or total capital is held by the
company granting the stock-based employee compensation.
The stock-based employee compensation under Paragraph 1 refers to shares issued as
employee compensation, employee stock options at cash capital increase, treasury shares
redeemed for issuance to employees, share subscription warrants issued to employees, and
new restricted shares issued to employees.
Transfer under Paragraphs 1 and 2 refers to change in the ownership of shares as a result of
sale, gift, distribution as estate, cancellation of shares for capital reduction, company
liquidation or other causes.
To be eligible for the incentive under Paragraph 1 to Paragraph 3, the company granting the
stock-based employee compensation shall, in the year its employees acquire stock-based
employee compensation or the year of the day the acquired shares become disposable, file
employees' choices of tax deferral and other related matters in the prescribed formats with
the central authority in charge of relevant enterprises for recordation, with copies of the
submissions delivered to the taxation authority at the place where the company is located.
The formats for filing the above matters shall be prescribed by the central competent
authority.
Where a company employee is applicable prescribed by Paragraph 2 or 3, the company
granting the stock-based employee compensation to the employee shall, in the year when the
employee has held the shares and continued to work at the company for two years, submit
documents proving that the employee has held the shares and continued to work at the
company for two years or more to the central authority in charge of the relevant enterprises
for recordation. A copy of the proof shall be delivered to the taxation authority at the place where the company is located.
The regulations governing the procedure for declaring deferred income on the stock-based
employee compensation under Paragraphs 1 to 3, setting of the date of acquisition of the
stock and the day the stock becomes disposable, calculation of the annual total of NT$5
million worth of the acquired shares, determination of the market price, documents required
for submission, and other related matters shall be prescribed by the Ministry of Finance.
Article 20
To promote investment, the central competent authority shall be responsible for the
following matters:
1. Establishment of an inter-ministerial coordination mechanism.
2. Provision of consultation and assistance with respect to investment procedures and
relevant matters.
3. Promotion and coordination of major investment plans.
4. Consultation and assistance with regard to other matters in furtherance of investment.
Article 21
To encourage industries to use international resources, the central authorities in charge of
relevant enterprises may provide appropriate assistance and guidance with respect to
overseas investment or international technology collaboration.
The regulations governing the recipients of assistance and guidance with respect to the
overseas investment and technology collaboration as referred to in the preceding paragraph,
the eligibility criteria, the review standards, the application procedures, the approving
authority, and other relevant matters shall be prescribed by the central authorities in charge of
relevant enterprises.
Article 22
Companies wanting to undertake overseas investment shall apply for approval from the
central competent authority before making the investment, provided that overseas
investments of NT$1.5 billion or less may be reported to the central competent authority
after the investment has been made.
The regulations governing the methods used to make overseas investment as referred to in
the preceding paragraph, the types of investment, the application deadline, the application
procedures, and other relevant matters shall be prescribed by the central competent authority.
Article 23
To attract funds back for investment in Taiwan, the central competent authority may
introduce measures to help investors obtain land for industrial use as an incentive for such
investments.
Article 23-1
To help innovative startups develop, a venture capital enterprise as referred to in Article 32,
incorporated during the period from January 1, 2017 to December 31, 2019 in accordance
with the Limited Partnership Act, meeting the requirements of the following subparagraphs,
and using each year’s funds equal to at least 50% of the aggregate capital contributions
received in that year within the territory of the R.O.C. or investing such funds in foreign
companies conducting their substantial operational activities within the territory of the
R.O.C. in accordance with the R.O.C. government’s policy as approved by the central
competent authority on a yearly basis, is eligible for the tax benefit under Paragraph 3.
1. On the day the year of incorporation or the second year of incorporation ends, the total
capital to be contributed pursuant to the limited partnership agreement reaches NT$300
million.
2. On the day the third year of incorporation ends, the total capital contributed by the venture
capital enterprise in accordance with the limited partnership agreement reaches NT$100
million.
3. On the day the fourth year of incorporation ends, the total capital contributed by the
venture capital enterprise in accordance with the limited partnership agreement reaches
NT$200 million, and the accumulated sum invested in innovative startups accounts for 30
percent or more of the total capital contribution received by the enterprise in that year or
reaches NT$300 million.
4. On the day the fifth year of incorporation ends, the total capital contributed by the venture
capital enterprise in accordance with the limited partnership agreement reaches NT$300
million, and the accumulated sum invested in innovative startups accounts for 30 percent or
more of the total capital contribution received by the enterprise in that year or reaches
NT$300 million.
Where an enterprise having been eligible for the tax benefit under Paragraph 3 subsequently
goes to liquidation, the enterprise may be exempt from the restrictions under the preceding
paragraph and remains eligible for the tax benefit during liquidation.
Within ten years from the fiscal year of incorporation, an enterprise conforming to Paragraph
1 may calculate its each year’s total income in accordance with Article 24 of the Income Tax
Act, and calculate each partner’s income from seeking profits according to the earning
distribution proportion under Paragraph 2, Article 28 of the Limited Partnership Act, and the
partner may be taxed or exempt from income tax on such income in accordance with the
Income Tax Act. However, an individual or a partner of a profit-seeking enterprise whose
head office is not within the territory of the R.O.C. is exempt from income tax sourced from
gains derived from securities transactions according to Article 4-1 of the Income Tax Act.
When the earnings are distributed to a partner by an enterprise subject to this Paragraph, such
earnings shall not be counted as the partner’s income.
Under special circumstances, an enterprise eligible for the tax benefit under the preceding
paragraph may file a special request for the central competent authority’s approval of a
one-time extension of the time limit for exemption under that paragraph for not more than
five years three months before the expiration of the time limit.
An enterprise subject to Paragraph 3 shall, during the period of application provided in said
paragraph, file annual income tax returns, and current final reports on total business income
or income earned from liquidation in the formats prescribed by the Ministry of Finance
within the time limits set forth in Paragraph 1 of Article 71, and Paragraphs 1 and 2 of
Article 75 of the Income Tax Act; it shall not be subject to the proviso of Paragraph 1, Article
39 of the Income Tax Act regarding deduction of losses, Paragraph 1 of Article 42 of the
same Act regarding exclusion of earnings from reinvestment for purpose of calculating
taxable income, and any other tax incentives under this Statute or other laws; in addition, it
shall not be required to set up a shareholder imputation credit account under Paragraph 1 of
Article 66 of the same Act, pay an additional 10-percent profit-seeking income tax on
undistributed surplus earnings under Article 66-9 of the same Act, file a statement of changes
in the shareholder imputation credit account under Paragraph 2 of Article 102-1 of the same
Act, or declare or pay the additional income tax on retained earnings under Paragraph 1 of
Article 102-2 of the same Act.
To be eligible for the tax benefit under Paragraph 3, an enterprise shall make the option
before the end of February in the year after its establishment. Once an option is made, it
cannot be reversed. During the period of application, if the central competent authority finds
that the enterprise does not comply with Paragraph 1, the enterprise shall no longer be
eligible for the tax benefit under Paragraph 3 and shall pay tax in accordance with the
Income Tax Act and the Basic Income Tax Act from the year it loses the eligibility.
An enterprise eligible for the tax benefit under Paragraph 3 may calculate the withholding
tax and the deductible tax distributable to each partner in a year out of the amount of tax
withheld from the enterprise’s income and the deductible income tax on the gross dividends
or gross earnings received by the enterprise from its invested enterprises in that year
according to the earning distribution proportion under Paragraph 2, Article 28 of the Limited Partnership Act. The withholding tax already paid may be offset against the income tax
payable by the partner. The deductible tax distributable to each partner shall be deducted
from the income tax payable by the partner as declared in the partner’s annual consolidated
income tax return or be included in the balance of the partner’s tax offsetting account. An
enterprise eligible for the tax benefit under Paragraph 3 shall, before the deadline for filing
the income tax return, or the current final report on total business income or income earned
from liquidation for each year, issue to each partner a certificate in the format prescribed by
the Ministry of Finance indicating the partner’s income calculated in accordance with
Paragraph 3 and the above-said withholding tax paid and the deductible tax distributable to
the partner, and attribute such income to the partner’s income for a year in which the
settlement date of the enterprise’s annual accounts, the day for filing the reasons for its final
income tax return for the current period, or the completion date of its liquidation process
falls.
Where a partner receiving income under Paragraph 3 is an individual not residing in the
R.O.C. or a profit-seeking enterprise having its head office outside the territory of the
R.O.C., the responsible person of the enterprise subject to Paragraph 3 shall be considered
the income tax withholder. The income tax shall be withheld from the taxpayer’s income
according to the applicable withholding tax rate before the deadline for filing the income tax
return, or the current final report on total business income or income earned from liquidation
for the current year and shall be all paid to the national treasury within 10 days after the
deadline passes. Withholding certificates proving such tax payment shall be issued to the
partners after the certificates have been filed with and verified by the taxation authority.
Where tax has been withheld from the partner’s income in accordance with the preceding
paragraph, the withheld amount shall be deducted from the tax amount payable by the
partner.
An innovative startup under Paragraph 1 refers to a company incorporated in accordance
with the Company Act or a foreign company conducting its substantial operational activities
within the territory of the R.O.C., and having been incorporated for less than five years when
an enterprise eligible for the tax benefit under Paragraph 3 acquired new shares issued by the
company.
A foreign company conducting its substantial operational activities within the territory of the
R.O.C. refers to a company incorporated in accordance with the law of a foreign country,
having a subsidiary or branch office in the R.O.C, and approved by the central competent
authority as meeting the following requirements:
1. The person who makes significant decisions in business management, financial
management, and personnel management for the company is an individual residing in the
R.O.C. or a profit-seeking enterprise having its head office within the territory of the R.O.C.,
or the place where such significant decisions are made is in the R.O.C.
2. The financial statements, records of accounting books, minutes of meetings of the board of
directors or minutes of meetings of the shareholders are prepared or stored within the
territory of the R.O.C.
3. Major business activities are carried out in the R.O.C.
The regulations for calculating the substantial capital contributions, the funds used within the
territory of the R.O.C. or invested in foreign companies conducting their substantial
operational activities within the territory of the R.O.C., the proportion of the funds so used or
invested, the extent of compliance with the R.O.C. government’s policy, the calculation of
the percentage of the accumulated sum invested in innovative startups out of the aggregate
capital contributions received by a limited partnership, and the application and reviewing
procedures under Paragraph 1; the special circumstances and the procedure for applying for
extension of the time limit for exemption under Paragraph 4; the regulations for identifying
foreign companies conducting substantial operational activities within the territory of the
R.O.C. under the preceding paragraph, and required supporting documents; and other
relevant matters shall be prescribed by the central competent authorities in consultation with
the Ministry of Finance.
Regulations for calculation of the income of enterprises subject to Paragraph 3 and the
procedure for declaring such income; the timing for including deductible income in
shareholder imputation credit accounts under Paragraph 7; the tax withholding procedure
under Paragraph 8; and other related matters shall be prescribed by the Ministry of Finance.
The income tax withholding rates under Paragraph 8 shall be set by the Ministry of Finance
and submitted to the Executive Yuan for approval.
Article 23-2
Where an individual invests at least NT$1 million in cash in one year in domestic innovative
startups that have been incorporated for less than two years and identified by the central
authority in charge of relevant enterprises as high-risk innovative startups, and acquires and
holds the new shares issued by the company for two years, up to 50 percent of the
investment may be excluded from the individual’s consolidated income for the year in which
the second anniversary of such shareholding falls. The aggregate amount excludable from an
individual’s consolidated income each year in accordance with this paragraph shall not
exceed NT$3 million.
The qualifications of the individuals, the scope and qualifications of the high-risk innovative
startups, the application deadline, the application procedure, the calculation of the
shareholding period, and the authorities giving the approval under the preceding paragraph
shall be prescribed or designated by the central competent authorities in consultation with the
Ministry of Finance.
Article 24
(deleted)
Article 25
To encourage companies to utilize global resources and internationalize their operations,
companies may apply to establish within the territory of the R.O.C. an operational
headquarters of a certain size and with significant economic benefits.
With respect to the operational headquarters of a certain size and with significant economic
benefits as referred to in the preceding Paragraph, regulations governing the size, the scope
of application, the application and approval procedures, and other relevant matters shall be
prescribed by the central competent authority.
Chapter Seven - Environment for the Sustainable Development of Industries
Article 26
To encourage the sustainable development of industries, the central authorities in charge of
relevant enterprises may provide enterprises with grants or guidance to promote the
following matters:
- Assisting enterprises in adapting to international regulations for environmental protection
and health and safety.
- Promoting the development and application of technology relating to greenhouse gas
reduction and pollution prevention.
- Encouraging enterprises to improve the efficiency of their energy and resource
consumption and to adopt relevant technologies that may recycle/renew energy/resources
and save energy and water.
- Production of non-toxic, less-polluting products and other products that reduce the burden
on the environment.
The regulations governing the recipients of the grants or guidance as referred to in the
preceding Paragraph, the eligibility criteria, the review standards, the application procedures,
the approving authority, and other relevant matters shall be prescribed by the central
authorities in charge of relevant enterprises.
Article 27
Each central authority in charge of relevant enterprises shall encourage government agencies
and institutions, and enterprises to procure software, and innovative and green products and
services.
To enhance the procurement efficiency for supply and demand, the central competent
authority may provide relevant assistance and services to the agencies and institutions
making procurements under the preceding paragraph. For procurements made through joint
supply contracts in accordance with the preceding paragraph, the common requirements may
be defined by the central competent authority in consultation with the central authority in
charge of the relevant entities as the policy demands.
Where the software, innovative and green products and services procured in accordance with
Paragraph 1 must pass testing, review, accreditation and certification, the charges for such
processes may be reduced, waived, or suspended.
A government agency/institution may specify in the tender documentation that priority shall
be given to procurement of innovative and green products or services identified as meeting
the requirements of Paragraph 1, provided that such priority does not violate any treaty or
agreement to which the R.O.C. is a party.
The regulations governing the specifications and categories of, and certification procedures
and review standards for, the software, innovative and green products and services under
Paragraph 1, the testing and review criteria, accreditation and certification under Paragraph
3, the method of making priority procurement under Paragraph 4, and other relevant matters
shall be prescribed by the central authorities in charge of relevant enterprises.
Article 28
To encourage enterprises to fulfill their social responsibility, the central authorities in charge
of relevant enterprises shall assist enterprises to actively disclose the relevant environmental information regarding their production processes, products, services, and other aspects of
sustainable development, and the enterprises with outstanding performance may be eligible
to receive commendations or awards.
Chapter Eight - Financial Assistance
Article 29
To accelerate industrial innovation and value addition, and promote economic transformation
and national development, the Executive Yuan shall establish a National Development Fund.
Article 30
The National Development Fund may be used for the following purposes:
- To invest in industrial innovation, high-tech development, recyclable/renewable
energy/resources, “green energy” industries, introduction of technology, and other important
businesses or projects that can enhance the efficiency of industries or improve the industrial
structure, in line with the national industrial development strategy.
- To provide financing facilities to supported projects relating to the sustainable
development of industries, pollution prevention, energy conservation, mitigation of the
greenhouse effect, and other areas that can enhance the efficiency of industries or improve
the industrial structure, in line with the national industrial development strategy.
- To assist the central authorities in charge of relevant enterprises in handling investment,
financing, or technology collaboration expenditure relating to relevant projects.
- To assist the relevant central authorities in charge of relevant enterprises in expenditure
required for projects undertaken for economic development, agricultural technology
development, social development, cultural and creative development, introduction of
technology, enhancement of R&D, development of own brands, human resources cultivation,
improvement of the industrial structure and relevant matters.
- Other matters approved by the Executive Yuan on a case-by-case basis.
Article 31
The funding sources of the National Development Fund shall be the appropriations from the
National Treasury, and in addition, the operating balance of the National Development Fund,
if any, may be put into the Fund following due budget approval procedures for continuous
use.
The regulations governing the management and utilization of the National Development Fund shall be prescribed by the Executive Yuan.
Article 32
The central competent authority shall provide guidance and assistance for venture capital
enterprises in order to stimulate the start-up and growth of domestic new businesses.
The regulations governing the scope of the venture capital enterprises as referred to in the
preceding Paragraph, the provision of guidance and assistance, and other relevant matters
shall be prescribed by the central competent authority.
Chapter Nine - Establishment and Management of Industrial Parks
Article 33
A central competent authority, a special municipal/county/city competent authority, a
state-owned or private enterprise, or an industrial entrepreneur may select a lot of land at a
certain size in accordance with the relevant industrial park establishment policy, and submit a
feasibility study report on the land together with all the required documents under the Urban
Planning Act, the Regional Planning Act, the Environmental Impact Assessment Act, and
other relevant laws and regulations to the authorities administering the above laws and
regulations for approval. After approval is obtained from the authorities, the feasibility study
report shall be submitted to the central competent authority for approval.
After the central competent authority approves the establishment of an industrial park in
accordance with the preceding Paragraph, it shall instruct the relevant special
municipal/county/city competent authority to make a public announcement within 30 days. If
such public announcement is not made within the time limit, the central competent authority
may make the public announcement on its behalf.
If the area of land selected by a special municipal/county/city competent authority, a
state-owned or private enterprise or an industrial entrepreneur in accordance with Paragraph
1 does not exceed a specific size and is located within the administrative district of a single
special municipal/county/city, the special municipal/county/city competent authority may
propose establishment of an industrial park on the land by submitting the documents required
by the applicable laws and regulations to the competent authority administering such laws
and regulations for approval. After the competent authority approves the proposal, the
proposal shall be submitted to the special municipal/county/city competent authority for
approval. After the special municipal/county/city competent authority approves the proposal,
it shall publicly announce it within 30 days.
Prior to submitting a feasibility study report under Paragraph 1, a central competent
authority, special municipal/county/city competent authority, state-owned or private
enterprise, or industrial entrepreneur shall hold a public hearing to listen to the views of the
owners of the land in question and other interested parties, and shall take full minutes of the
meeting and submit the minutes to the relevant competent authorities for their review, except
where the state-owned or private enterprise or the industrial entrepreneur proposes to
establish an industrial park on its own land.
The guidelines for establishing industrial parks under Paragraph 1, the size of the land
required for the establishment of an industrial park, and the size of an industrial park area
that may be approved by a special municipal/county/city competent authority as referred to
in Paragraph 3 shall be prescribed by the central competent authority in consultation with the
Ministry of the Interior.
Article 34
Where a state-owned or private sector enterprise or industrial entrepreneur applies for
establishment of an industrial park, prior to the rezoning of the land in question, an amount
equivalent to the then-current announced land value of 5% of the total land area at the time
of the approval for establishment of the industrial park shall be paid to the industrial park
development and management fund established by the special municipality or county (city)
competent authority, notwithstanding any restriction under the provisions of Article 15-3 of
the Regional Planning Act.
The special municipality and county (city) competent authority shall set aside a specified
percentage of the sum paid in accordance with the preceding Paragraph to be used for the
construction, maintenance, or improvement of relevant public facilities in the vicinity of the
industrial park and to improve environmental protection in the affected area.
The percentage of the funds to be set aside as referred to in the preceding Paragraph shall be
prescribed by the central competent authority in consultation with the Ministry of the
Interior.
Article 35
With respect to the industrial park of which a state-owned or private sector enterprise or an
industrial entrepreneur applies for establishment, the construction permit shall be obtained
within three years from the next date on which approval of establishment is publicly
announced. If the construction permit is not obtained within the prescribed period, the
original establishment approval shall become invalid.
After the approval for the establishment of an industrial park becomes invalid, the special
municipality or county (city) competent authority shall notify the land registration authority
to restore the land to its original zoning and designation pattern, and shall notify the central
competent authority for recordation.
Article 36
To promote industrial transformation and upgrading in order to maintain the livelihood of
local industries and small- and medium-sized enterprises and protect local job opportunities
and preserve the environment, the central competent authority may, in consultation with the
Ministry of the Interior, plan the establishment of small rural industrial parks or small local
industrial parks, and may provide necessary assistance, guidance, or grants.
The regulations governing the recipients of the assistance, guidance, or grants as referred to
in the preceding Paragraph, the eligibility criteria, the review standards, the application
procedures, and other relevant matters shall be prescribed by the central competent authority.
Article 37
The central competent authority or a special municipality or county (city) competent
authority may commission a state-owned or private sector enterprise to file the application
for establishment of an industrial park, and undertake the planning, the development, the
lease or sale, or the administration of the park.
With respect to the commissioning of enterprises as referred to in the preceding Paragraph, if
the commissioned state-owned or private sector enterprise is also responsible for raising the
necessary funds, it may be by means of open selection and the provisions of the Government
Procurement Act and the Act for Promotion of Private Participation in Infrastructure Projects
shall not apply.
The regulations governing eligibility of the state-owned or private sector enterprises as
referred to in the first Paragraph, the terms and conditions of the commissioning, the scope
of commissioned business, and the conditions and procedures for the open selection as
referred to in the preceding paragraph, the handling of expiring development contracts, and
relevant matters shall be prescribed by the central competent authority.
Article 38
Where the land within an industrial park is to be reclaimed from the sea, the following
matters shall be performed prior to the commencement of reclamation work:
1. Where the developer is the central competent authority, the approved reclamation
construction management plan shall be submitted to the Ministry of the Interior for
recordation.
2. Where the developer is a special municipality or county (city) competent authority or a
state-owned or private sector enterprise, or an industrial entrepreneur, the developer shall
submit a reclamation construction management plan to the central competent authority for
review and approval, and pay the review fee. Reclamation work shall not begin until a
development bond has been paid and a development contract has been signed with the
central competent authority.
The regulations governing the contents of the reclamation construction management plan as
referred to in the preceding Paragraph, the application procedures, the development bond,
and other relevant matters shall be prescribed by the central competent authority.
Article 39
The land in an industrial park may be used as follows:
1. Land for industries.
2. Land for communities.
3. Land for public facilities.
4. Other types of land approved by the central competent authority.
The area of the land for industries shall not be less than 60% of the total land area of an
industrial park.
The area of the land for communities shall not be more than 10% of the total land area of an
industrial park.
The area of the land for public facilities shall not be less than 20% of the total land area of an
industrial park.
The regulations governing the uses of the types of land as referred to in the first Paragraph,
the permitted scope of use, and other relevant matters shall be prescribed by the central
competent authority.
Article 40
Where, in order to meet the needs of industrial park development, an application for altering
an already approved industrial park environmental impact statement or assessment is to be
made, if a table of alterations shall be submitted in accordance with the provisions of the
Environmental Impact Assessment Act and the content of the alterations conforms to one of
the following requirements, the application may be reviewed and approved by the central
competent authority or the special municipality or county (city) competent authority that
approved the establishment of the industrial park, and the approved application shall be
submitted to the central authority in charge of environmental protection for record, and the
provisions of Article 16 of the Environmental Impact Assessment Act shall not apply.
1. Combination or division of land plots within the industrial park.
2. Partial adjustment of the location of the public facilities within the industrial park.
The regulations governing the review process as referred to in the preceding Paragraph shall
be prescribed by the central competent authority in consultation with the central authority in
charge of environmental protection.
Article 41
Where the central competent authority or a special municipality or county (city) competent
authority is to develop an industrial park, after the public announcement of the approval for
establishment of the industrial park but prior to the commencement of development work,
the local special municipality government or county (city) competent authority shall publicly
announce the suspension of transfer of ownership of the land and the buildings thereon, and
the suspension of accepting applications for construction permits. The announced period of
such suspension shall not exceed two years. Where a construction permit has already been
obtained, construction work shall not commence until consent is given by the central
competent authority or the special municipality or county (city) competent authority.
The suspension of transfer of ownership of land and buildings publicly announced in
accordance with the preceding Paragraph shall not apply to any transfer effected as a result
of inheritance, compulsory execution, expropriation for public purposes, or court judgment.
Article 42
Where privately owned land is required by the central competent authority or a special
municipality or county (city) competent authority for the development of an industrial park,
the land may be expropriated.
Where government-owned land is required by the central competent authority or a special
municipality or county (city) competent authority for the development of an industrial park,
the authority responsible for the sale of the government-owned land in question may conduct
the sale without being subject to the restrictions set forth in Article 25 of the Land Act or the
laws and regulations governing the management of public property promulgated by the
relevant local government.
The sale price of the government-owned land sold in accordance with the preceding
Paragraph shall be calculated at the same compensation amount for the privately owned land
that is located in the same land-value area and which is used for the same original purpose
and expropriated for development of the industrial district. However, if the entire portion of
land in the industrial park under development is government-owned, the value of such land
shall be determined in accordance with the evaluation standard applicable to the disposition
of ordinary public property.
Article 43
Where a state-owned or private sector enterprise, or an industrial entrepreneur has a need to
use privately-owned land to develop an industrial park, such developer shall obtain the land
on its own. However, under any of the following circumstances, the developer may apply to
the special municipality or county (city) competent authority for land expropriation:
- Where the original owner of the privately owned land has died and his/her heir fails to
apply for registration of succession within two years from the date of inheritance.
- Where the land cannot be purchased due to the death of the administrator of the clan
property of an ancestral shrine.
Land expropriated in accordance with the preceding Paragraph shall be sold directly to the
state-owned or private sector enterprise, or industrial entrepreneur as referred to in the
preceding Paragraph by the special municipality or county (city) competent authority that
conducts the expropriation without being subject to the restrictions set forth in Article 25 of
the Land Act and the laws and regulations governing the management of public property
promulgated by the relevant local government. The sale price shall be determined by the
special municipality or county (city) competent authority.
Where government-owned land is required by a state-owned or private sector enterprise, or
an industrial entrepreneur to develop an industrial park, the authority responsible for the sale
of the government-owned land shall conduct the sale. Where the government-owned land
occupies no more than one tenth of the total land area of the industrial park, or for no more
than 5 hectares in total, the restrictions set forth in Article 25 of the Land Act and the laws
and regulations governing the management of public property promulgated by the relevant
local government shall not apply. The sale price shall be determined according to the
evaluation standard applicable to the disposition of ordinary public property.
Article 44
When the central competent authority or a special municipality or county
(city) competent authority undertakes development of an industrial park, if the park contains
land that has already been and will continue to be used for industrial purposes, the owner of
such land shall share the costs of developing and constructing the industrial park in
proportion to the size of such land.
The costs of developing and constructing the industrial park shall be determined by the
competent authority which develops the industrial park.
Article 45
The land, buildings, and facilities located within an industrial park developed by the central
competent authority or a special municipality or county (city) competent authority shall be
utilized, used for profit, managed, and disposed of by the relevant competent authority in
accordance with this Statute without being subject to the restrictions set forth in Article 25 of
the Land Act, the National Property Act, or the laws or regulations governing the
management of public property promulgated by the relevant local government.
Where a lease is made for any purposes under the preceding Paragraph, the calculation of
rental and guarantee bond shall not be subject to the restrictions of Article 97, Paragraph 1
Article 99, or Article 105 of the Land Act; the termination of the lease agreement or the
recovery of the lease property shall not be subject to the restrictions of Paragraph 2 or 3 of
Article 440 of the Civil Code or Article 100 or 103 of the Land Act. Where a superficies is
created for the purposes of the preceding Paragraph, the provisions of Paragraph 1 of Article
836 of the Civil Code, which stipulates that the total amount of outstanding land rental must
amount to the sum of two years' land rental before superficies can be invalidated, shall not
apply.
Article 46
The land, buildings, and facilities located within an industrial park developed by the central
competent authority or a special municipality or county (city) competent authority shall be
utilized, used for profit, or disposed of in accordance with the following provisions
respectively. The prices of utilizing, profiting from, and disposal of such land, buildings, and
facilities shall be determined by the competent authority that develops the industrial park,
provided that where the development funds are all raised by a commissioned state-owned or
private sector enterprise, these matters are handled in accordance with the terms of the
development mandate agreement.
- With respect to land for industries and the buildings erected thereon, the competent
authority that develops the industrial park shall handle the lease or sale of, or establishment
of superficies on, the land or buildings, or shall handle the matters in other ways as approved
by the central competent authority.
- With respect to land for communities, the competent authority that develops the industrial
park shall handle the matters using the following methods in the order of priority:
(1) Allocated sale to the owners of land or buildings purchased or expropriated.
(2) Sale to enterprises located within the industrial park for the construction of employee
housing and sale to employees for housing construction.
(3) Sale for construction of residential properties.
3. With respect to land for public facilities, public buildings, and public facilities, the
competent authority that develops the industrial park shall handle their lease, sale,
encumbrance, use for benefits, and provision for use free of charge.
The term “owners of buildings” as referred to in Item (1) of Subparagraph 2 in the preceding
Paragraph shall refer to only those owners who have already completed cadastral registration
prior to the date when suspension of transfer of ownership is announced as referred to in
Paragraph 1, Article 41 hereof.
The regulations governing the procedures, conditions, and other relevant matters regarding
the utilization of, profits from, and disposal of the land, buildings, and facilities as referred to
in Paragraph 1 shall be prescribed by the central competent authority.
With respect to the land located within an industrial park developed by the central competent
authority or a special municipality or county (city) competent authority, approval may be
sought from the Executive Yuan for the sale of such land on a case-by-case basis, in line with
the policy of national economic development, and in light of the location of the land, the
anticipated buyers, the sale prices and other terms and conditions; the purchasers of the land
may complete the construction of the relevant public facilities in accordance with the
feasibility study.
Article 46-1
Where the owner of a plot of land in an industrial park developed and established by the
central competent authority or a special municipality or county (city) competent authority
has kept the land idle for a certain consecutive period without good reasons, and the land is
in a condition set forth in the criteria for identifying idle land prescribed by the central
competent authority, the central competent authority may announce that the land is idle, and
notify the land owner and the interested parties that a building/buildings has/have to be
constructed on the land for use in accordance with the laws in two years, unless the land is
subject to any contract between the land owner and a competent authority or is to be
disposed of in accordance with the applicable regulations. The competent authority may at
any time provide guidance to such a landowner and the interested parties on how to
construct buildings on the land for use within the given time limit.
Where the competent authority orders the construction of buildings for use within the time
limit pursuant to the preceding paragraph, the competent authority shall request the land
registration agency to add a note to the registration of such buildings indicating such a
requirement. The requirement shall be valid for two years. If title to the land is transferred to
another within the two years, the requirement shall be assumed by the successor to the title.
The two-year period shall be reduced by the number of the days in which the requirement is
suspended for causes not attributable to the land owner, and may be extended if requested by
the landowner for good reasons.
Where a building (buildings) has (have) been constructed on a plot of land and used within
the period under the preceding two paragraphs in accordance with the law, the competent
authority shall request the land registration agency to cancel the note. Where no building is
constructed on such a plot of land in the given time limit, the competent authority may fine
the landowner with an amount of up to 10 percent of the assessed then current value of the
idle land and order the land owner to propose a correction plan within one month. Upon
receipt of the correction plan, the competent authority may notify the land owner for
consultation. The landowner shall complete the consultation within one month of receipt of
the notice from the competent authority. To promote use of the land in industrial parks in line
with the legislative purposes and development of national economy, and prevent land
hoarding from harming public interests, if a landowner fails to propose an correction plan or
complete consultation with the competent authority within the given time limit, the authority
may decide in writing that the idle land shall be put up for open compulsory auction after a
reasonable price is set on the basis of an appraised market price.
The competent authority shall request branch offices of the Administrative Enforcement
Agency of the Ministry of Justice to conduct the compulsory auction under the preceding
Paragraph. Unless otherwise specified in this Article, the auction procedures under the
Administrative Enforcement Act shall apply mutatis mutandis to the auction under this
Article.
If all the bids for a plot of idle land subject to compulsory auction under the preceding two
paragraphs are deemed invalid; the highest bid from the bidders is lower than the reasonable
price set on the basis of the appraised market price; any other auction requirements are not
met, the land shall not be auctioned off.
In the event of a situation described in the preceding paragraph, the competent authority may
request that another auction for the same or another reasonable price be held in accordance
with the preceding three paragraphs.
As soon as a plot of land is auctioned off, there shall be no preferential right to purchase the
land under the Land Act or other laws or regulations, and the competent branch office of the
Administrative Enforcement Agency of the Ministry of Justice shall ask the land registration
agency to cancel or remove all the noted requirements for, encumbrances, restraints or
leasehold on the land before the land is delivered to the winner of the auction. If the
competent authority considers it unnecessary to continue the auction procedure, it may
withdraw its request to the competent branch office of the Administrative Enforcement
Agency of the Ministry of Justice for the auction, and request the land registration agency to
cancel the noted requirement.
The criteria for defining idle land and land having been used to construct buildings, public
announcements, notices, reduction of the time limit for non-attributable causes, reasons
supporting request for extension of the time limit, matters noted as requested by the
competent authorities, the methods, procedures, and guidelines for deciding appraised
market prices, qualifications for bidders for compulsory auction, and the terms for using land
acquired under the preceding seven paragraphs shall be prescribed by the central competent
authorities.
Article 47
With respect to an industrial park developed by the central competent authority or a special
municipality or county (city) competent authority, where the funds are all raised by the
commissioned state-owned or private sector enterprise, the development cost, within the
term of the development mandate agreement, shall be determined by such competent
authority. In the event that the proceeds from the sale of land or buildings exceed the cost,
the commissioned state-owned or private sector enterprise shall pay a certain percentage of
the difference to the industrial park development and management fund established by such
competent authority. The certain percentage shall not be lower than 50% of the difference.
On the expiry of the development mandate agreement, the competent authority that develops
the industrial park may dispose of any as yet unleased and unsold land or buildings located
within the industrial park using one of the following methods:
- Paying a reasonable price to the commissioned state-owned or private sector enterprise,
provided that such reasonable price does not exceed the share of the actual development
costs allocated to the land or buildings in question.
- Notifying the special municipality or county (city) government within whose jurisdiction
the industrial park is located to instruct the relevant registration authority to transfer the
ownership to the commissioned state-owned or private sector enterprise. The commissioned
state-owned or private sector enterprise shall continue to use and dispose of the same in
accordance with the planning for the industrial park.
The method for determining the development cost, the payment percentage of the difference,
and the method for calculating the reasonable price as referred to in the preceding two
Paragraphs shall be expressly stipulated by the competent authority in the development
mandate agreement.
Article 48
With respect to an industrial park developed by the central competent authority or a special
municipality or county (city) competent authority, with the exception of land for
communities that is allocated for sale, when selling all other land and buildings, the
purchaser shall pay the development and management fund in an amount equivalent to 1% of
the purchase price to the industrial park development and management fund established by
the competent authority.
Prior to the registration of transfer of ownership in accordance with Subparagraph 2,
Paragraph 2 of the preceding Article, the commissioned state-owned or private sector
enterprise shall pay the industrial park development and management fund in an amount
equivalent to 1% of the reasonable price.
Article 49
To meet the needs of industrial park development and ensure sound industrial park
management, the central competent authority or a special municipality or county (city)
competent authority may establish an industrial park development and management fund.
In principle, an industrial park development and management fund shall be established in
such a way as to be self-financing.
The funding sources for an industrial park development and management fund shall be as
follows:
1. Monetary contributions made in accordance with the provisions of this Statute.
2. Interest on loans.
3. Payments received in accordance with the provisions of the preceding Article.
4. Industrial park maintenance fees, usage charges, administration fees, service fees, and
royalties.
5. Remnant funds left over after the completion of the industrial park development.
6. Appropriations by the government in accordance with budgetary procedures.
7. Interest income of the fund.
8. Revenue from investment in relevant enterprises located in the industrial park.
9. Income in excess of the cost collected in accordance with the provisions of Paragraph 1,
Article 47 above.
10. Other relevant sources of income.
The industrial park development and management fund may be used for the following
purposes:
1. To provide financing for industrial park development.
2. To subsidize the increased interest on development cost where it proves impossible to sell
or lease the land or buildings within the industrial park for an extended period, resulting in a
situation where the rental or price of land or buildings within the industrial park is higher
than the rental or price of land or buildings for equivalent use in the neighboring areas.
3. To pay for the construction, maintenance, or improvement of public facilities in the
industrial park or the adjacent areas.
4. To meet the operating costs of the industrial park administration.
5. To improve environmental protection in the industrial park or in the adjacent areas
affected by the industrial park.
6. To fund research, planning, or promotional work relating to the industrial park.
7. To make investments in businesses related to the industrial park.
8. To pay out specified amounts for subsequent relief or compensation relating to major
accidents within the industrial park that affect the general public.
9. Other relevant expenditures.
Article 50
An industrial park shall establish an administration agency in accordance with the following
provisions to handle the management and maintenance of and provide services and guidance
relating to land for public facilities, public buildings, and public facilities within the
industrial park:
1. In the case of an industrial park developed by the central competent authority or a special
municipality or county (city) competent authority, the competent authority shall establish the
administration agency. The competent authority may also commission another authority or a
state-owned or private sector enterprise to establish or manage the administration agency.
2. In the case of an industrial park developed by a state-owned or private sector enterprise,
when arranging the lease or sale of the land, such state-owned or private enterprise shall
apply to the special municipality or county (city) government with jurisdiction over the
industrial park for the establishment of an administration agency with a juridical person
status.
3. In the case of an industrial park jointly developed by two or more industrial entrepreneurs,
the administration agency shall be established at the time of the public announcement of
industrial park establishment by the local special municipality or county (city) competent
authority.
4. In the case of an industrial park developed by a single industrial entrepreneur, or where the
entirety of such industrial park is leased or sold to another single industrial entrepreneur for
the exclusive use of such industrial entrepreneur, the requirement to establish an
administration agency may be waived.
With respect to the administration agency established by the central competent authority or a
special municipality or county (city) competent authority in accordance with the provisions
of the preceding Paragraph, the regulations governing the organization, personnel
management, salaries standards, deposits for retirement/severance benefits, consolation
payments, and other relevant matters shall be prescribed by the competent authority.
Where the central competent authority or a special municipality or county (city) competent
authority commissions another authority or enterprise to establish the administration agency
on its behalf in accordance with the provisions of Subparagraph 1, Paragraph 1, the
regulations governing the operation, management, and other relevant matters shall be
prescribed by the central competent authority.
Article 51
With respect to an industrial park developed by the central competent authority or a special
municipality or county (city) competent authority, the land for public facilities, public
buildings, and public facilities in the park shall be managed by the industrial park
administration agency on behalf of the competent authority, and shall be registered in
accordance with the following provisions, unless otherwise provided for in this Statute:
- In the case of an industrial park developed by the central competent authority, the state
shall be the registered owner, and the management agency shall be the Ministry of Economic
Affairs. However, the land for public facilities, public buildings, and public facilities within a
community shall be registered as owned by the local special municipality or county (city), and the management agency shall be the competent authority of such special municipality or
county (city) government.
- In the case of an industrial park developed by a special municipality or county (city)
competent authority, the municipality or county (city) shall be the registered owner, and the
management agency shall be the special municipality or county (city) competent authority.
In the case of an industrial park developed by a state-owned or private enterprise, ownership
of the land for public facilities, public buildings, and public facilities shall be transferred free
of charge to the relevant administration agency. However, if the land for public facilities,
public buildings, and public facilities are for the use of unspecified people or are located in
communities, their registered owners shall be the local special municipalities or counties
(cities), and shall be managed by the competent authorities of the special municipal or
county (city) governments.
Once ownership has been transferred by a state-owned or private enterprise to the
administration agency in accordance with the provisions of the preceding Paragraph, the
lease of, sale of, encumbrance on, or other disposal of the land for public facilities, public
buildings, and public facilities shall not be valid unless it has been approved by the
competent authority of the special municipality or county (city) government.
Article 52
An industrial district that developed before this Statute comes into force may establish an
administration agency in accordance with the provisions of Article 50.
In the case of an industrial district developed by a special municipality or county (city)
competent authority before this Statute comes into force, if it is being managed by the central
competent authority, the central competent authority may transfer the responsibility for
management of the industrial district to the special municipality or county (city) competent
authority, and may conduct transfer registration with respect to the land for public facilities,
public buildings, and public facilities within the industrial district without being subject to
the restrictions set forth in Article 25 of the Land Act, the National Property Act, and the
laws and regulations governing the management of public property promulgated by the
relevant local government.
The regulations governing the transfer of responsibility as referred to in the preceding
Paragraph, conditions of accepting responsibility, procedures, and other relevant matters
shall be prescribed by the central competent authority.
Article 53
An administration agency that has been established in accordance with the provisions of
Article 50 may require payment of the following fees from the users of the industrial park:
1. General maintenance fees for public facilities.
2. Usage fees for the waste water treatment system.
3. Usage fees or maintenance fees for other specific facilities.
The charging rates for the above fees shall be formulated by the administration agency. In the
case of an industrial park developed by the central competent authority, the charging rates
shall be reported to the central competent authority for its approval. In the case of an
industrial park developed by the competent authority at the special municipality or county
(city) government level, or by a state-owned or private sector enterprise, the charging rates
shall be reported to such special municipality or county (city) competent authority for its
approval.
If users of an industrial park developed by the central competent authority or a special
municipality or county (city) competent authority fail to pay the fees prescribed in Paragraph
1 within the deadline specified, they shall pay a delinquent fee equivalent to 1% of the fees
due for every two days of delay; the cumulative total delinquent fee shall be capped at 15%
of the total fees payable by the delinquent users.
Article 54
The central competent authority or a special municipality or county (city) competent
authority may alter the land allocation plan for an industrial park if necessary for government
policy or industrial development, provided that such alteration does not go against the land
area percentages, land uses, and usage regulations provided in Paragraphs 2 through 5 of
Article 39.
The proviso in the preceding Paragraph regarding land area percentages shall not apply to
industrial land or industrial districts that were approved on or prior to December 31, 1999.
A landowner may apply to the central competent authority or a special municipality or
county (city) competent authority for land rezoning. In such cases, the central competent
authority or the special municipality or county (city) competent authority shall charge the
applicant a review fee for reviewing the rezoning application.
Where a rezoning application submitted in accordance with the provisions of the preceding
Paragraph is approved by the central competent authority or a special municipality or county
(city) competent authority, the applicant shall make a monetary contribution based on the
rezoning category and a certain percentage of the current announced land value as of the
time of the approval.
With respect to the land rezoning plans as referred to in Paragraphs 1 and 3, the regulations
governing the eligibility criteria, the required documents, the application procedures, the
approval criteria, the grounds for revocation or abolishment, the standards for setting the
review fees and monetary contribution as referred to in the two preceding Paragraphs, and
other relevant matters shall be prescribed by the central competent authority.
Article 55
If the entirety or a part of an industrial park no longer needs to exist due to changes in the
overall environment, the central competent authority or the special municipality or county
(city) competent authority that originally gave approval for its establishment may revoke the
original approval. Such revocation of the original approval shall be publicly announced by
the special municipality or county (city) competent authority within 30 days from the date of
revocation. If the special municipality or county (city) competent authority does not
announce such revocation within the time limit, the central competent authority may make
the announcement on its behalf. Where the revocation of the original approval concerns
rezoning of land, the approval of the authority in charge of urban planning or regional
planning shall be obtained before the public announcement can be made.
Where the original approval is revoked by a special municipality or county (city) competent
authority in accordance with the preceding Paragraph, the competent authority shall submit
documents regarding the revocation to the central competent authority for recordation.
The regulations governing the criteria for determining whether existence of an industrial park
is no longer needed as referred to in Paragraph 1, the procedures for revocation of an
establishment approval, and other relevant matters shall be prescribed by the central
competent authority.
Chapter Ten - Establishment and Management of Exclusive Industrial Harbors and Exclusive Industrial Wharfs
Article 56
The central competent authority, based on policies or to meet the operational needs of the
industrial entrepreneurs within the industrial park, may establish an exclusive industrial
harbor or exclusive industrial wharf within an industrial park the establishment of which it
has approved, if, through evaluation, it has been determined that the needed service cannot
be provided by neighboring commercial ports.
The central competent authority shall first consult with the Ministry of Transportation and
Communications, and then submit the proposal to establish an exclusive industrial harbor or
exclusive industrial wharf to the Executive Yuan for approval.
For the delineation of the zone for an exclusive industrial harbor or exclusive industrial
wharf, the central competent authority shall consult with the Ministry of Transportation and
Communications, the Ministry of the Interior, and other relevant agencies, and then submit
the proposal to the Executive Yuan for approval.
For the designation of an exclusive industrial harbor or exclusive industrial wharf, the central
competent authority and the Ministry of Transportation and Communications shall jointly
seek the approval of the Executive Yuan, and make a public announcement upon the granting
of an approval.
Article 57
The land within an exclusive industrial harbor or an exclusive industrial wharf shall be
registered as state-owned, and the Ministry of Economic Affairs shall be the management
agency.
The permitted users of the exclusive industrial harbor or the exclusive industrial wharf shall
be determined by the central competent authority in consultation with the Ministry of
Transportation and Communications.
An exclusive industrial harbor or the exclusive industrial wharf shall not be used for any
purposes other than for the industrial park.
Article 58
An exclusive industrial harbor or exclusive industrial wharf may be constructed and operated
directly by the central competent authority, or alternatively, the central competent authority
may approve its investment, construction, and operation by a state-owned or private sector
enterprise.
Where the central competent authority has approved a state-owned or private sector
enterprise to invest in the construction and operation of an exclusive industrial harbor or
exclusive industrial wharf, the central competent authority shall sign an investment and
construction agreement with the state-owned or private sector enterprise, and shall collect
royalties from the enterprise, to be paid to the industrial park development and management
fund established by the central competent authority.
Where a state-owned or private sector enterprise invests in the construction of facilities and
buildings relating to the investment and construction of an exclusive industrial harbor or
exclusive industrial wharf as referred to in Paragraph 1, a clause may be included in the
investment and construction agreement specifying that, during the period of construction and
operation, the facilities and buildings shall be registered as owned by the state-owned or
private sector enterprise, and that the enterprise shall be responsible for their management
and maintenance.
During the period of construction and operation as referred to in the preceding Paragraph, the
state-owned or private sector enterprise shall not transfer ownership of the facilities and
buildings that it has invested in and constructed. Upon the expiry of the period of
construction and operation, ownership of the facilities and buildings shall be transferred to
the state, and the facilities and buildings shall be managed by the central competent
authority.
The regulations governing the execution of the planning and construction of an exclusive
industrial harbor or exclusive industrial wharf, harbor operation, wharf management,
construction of exclusive wharf, management and maintenance, entry into and exit from the
harbor by vessels, mooring, lay-up, harbor safety, regulations governing industries in the
harbor area, and other relevant matters shall be prescribed by the central competent authority
in consultation with the Ministry of Transportation and Communications.
Article 59
The central competent authority may approve the lease of wharf land within an exclusive
industrial harbor to industrial entrepreneurs located within the industrial park for use in the
construction of relevant facilities and buildings for their own use. The constructed facilities
and buildings may be registered as the property of the industrial entrepreneurs, who shall be
responsible for their management and maintenance.
Article 60
If necessary for national security or government policy, the central competent authority may
reclaim land and relevant facilities and buildings located within an exclusive industrial
harbor or exclusive industrial wharf.
Where the central competent authority reclaims land and relevant facilities or buildings in
accordance with the provisions of the preceding Paragraph, it shall compensate the
state-owned or private sector enterprise or industrial entrepreneur for the following:
1. Any operating loss sustained as a result of such reclaim.
2. With respect to the relevant facilities or buildings the construction of which had been
approved, the compensation shall be based on the value determined by the central competent
authority at the time of construction completion, less allowance for depreciation.
Where a state-owned or private sector enterprise as referred to in Paragraph 1 of Article 58
breaches the investment and construction agreement, or where an industrial entrepreneur as
referred to in the preceding Article breaches the lease agreement, leading the central
competent authority to terminate the investment and construction agreement or the lease
agreement, the central competent authority may reclaim the land and relevant facilities and
buildings within the exclusive industrial harbor or exclusive industrial wharf; no
compensation shall be paid for any relevant facilities or buildings that have been constructed
by the state-owned or private sector enterprise or industrial entrepreneur.
Article 61
If, during the period of construction, management or use of an exclusive industrial harbor or
exclusive industrial wharf, a state-owned or private sector enterprise as referred to in
Paragraph 1 of Article 58 or an industrial entrepreneur as referred to in Article 59 falls
seriously behind schedule in construction work, or there is a serious deficiency in the quality
of construction, or there is inappropriate management, or the public welfare is threatened, or
the normal operation of the relevant facilities of an exclusive industrial harbor or exclusive
industrial wharf is disrupted, or any other major problem occurs, the central competent
authority may handle these matters in the following order of priority:
1. Order the correction of the situation within a specified time limit.
2. In case of a failure to correct the situation within the specified time limit, or if the
corrective measures are ineffective, the central competent authority may order the stoppage
of all or part of the construction, management, or usage within a specified time period.
3. In case of a failure to correct or if the corrective measures are ineffective, and the situation
is serious, the central competent authority may revoke the approval for construction and
operation, and may compulsorily take over the operation.
The regulations governing the person taking over the operation compulsorily as referred to in
the preceding Paragraph, matters to be publicly announced prior to the take-over, matters that
the party against which the take-over is effected is required to comply with, workers’ rights
and benefits, expenses incurred for the take-over of operation, termination of the take-over of operation, and other relevant matters shall be prescribed by the central competent authority.
Article 62
The central competent authority may collect administration fees from the users of an
exclusive industrial harbor or exclusive industrial wharf.
The owner of the relevant facilities and buildings within an exclusive industrial harbor or
exclusive industrial wharf may collect usage fees from the users of such facilities or
buildings.
The operator of an exclusive industrial harbor or exclusive industrial wharf may collect
service fees from the users of such exclusive industrial harbor or exclusive industrial wharf.
With respect to the administration fees, usage fees, and service fees as referred to in the three
preceding Paragraphs, the regulations governing fee items, charging rates, and methods of
calculation shall be prescribed by the central competent authority in consultation with the
Ministry of Transportation and Communications.
Article 63
To prevent imminent danger or to meet the special needs of emergency, the central
competent authority or the authority in charge of navigation may demand use of the facilities
of exclusive industrial harbors or exclusive industrial wharfs free of charge.
Article 64
Regarding the planning, construction, administration, operation, and security of exclusive
industrial harbors or exclusive industrial wharfs, in addition to the provisions of this Statute,
the provisions of Articles 5, 10, 16 to 21, 23 to 26 and 29, Paragraph 3 of Article 30, Articles
31 to 33, Articles 37 to 48 and Article 50 of the Commercial Harbor Act shall apply mutatis
Mutandis.
The central competent authority may only authorize a commercial harbor management
agency to take charge of the administration of an exclusive industrial harbors or exclusive
industrial wharfs in consultation with the Ministry of Transportation and Communications.
Chapter Eleven - Factory Expansion Guidance
Article 65
Where an industrial entrepreneur needs to use adjacent non-urban land for the expansion of
industrial activities or the establishment of pollution prevention facilities, the expansion plan
and the size of the land needed shall be subject to approval by the special municipality or
county (city) competent authority, and the competent authority will issue an industrial land
certificate for the purposes of land rezoning.
Industries needing expansion of industrial activities as referred to in the preceding Paragraph
shall be restricted to low-polluting industries, as defined by the relevant special municipality
or county (city) competent authority.
Where expansion of industrial activities is conducted in accordance with the provisions of
Paragraph 1, 10% of the total rezoned area shall be set aside for use as green space. The
relevant special municipality or county (city) competent authority shall conduct the rezoning
of the green space land as national safety use land.
An industrial entrepreneur who wishes to expand industrial activities or establish pollution
prevention facilities shall make a monetary contribution prior to the rezoning of the relevant
land. The provisions of Paragraph 1, Article 34 shall apply mutatis mutandis to the
calculation and payment of the monetary contribution.
With respect to the state-owned land located in an expanded area as referred to in Paragraph
1, the agency responsible for selling the land shall conduct sale or lease of the land without
being subject to the restrictions of Article 25 of the Land Act or the laws or regulations
governing management of public property promulgated by the relevant local government.
The sale price shall be set according to the price calculation standards for the disposal of
ordinary public property.
Where a special municipality or county (city) competent authority reviews an expansion
plan, it shall collect a review fee from the applicant.
The regulations governing the criteria for application for expansion plans as referred to in
Paragraph 1, the documents needed, the application procedures, the restrictions on the size of
land for which application may be made, the criteria for determining whether an industrial
activity falls under the category of “low-polluting” industrial activities as referred to in
Paragraph 2, the standards for collection of review fees as referred to in the preceding
Paragraph, and other relevant matters shall be prescribed by the central competent authority.
Article 66
An industrial entrepreneur applying for the use of adjacent non-urban land shall complete the
utilization of the land in accordance with the approved expansion plan within two years from
the day following completion of the rezoning of the utilized land. Until such time as the
utilization of the land has been completed, the industrial entrepreneur shall not re-sell,
sub-let, create superficies on, or in any other fashion allow another party to use the land, in
whole or in part.
If, for reasons, an industrial entrepreneur is unable to complete utilization of the land within
the time limit specified in the preceding Paragraph, such industrial entrepreneur may apply to
the relevant special municipality or county (city) competent authority for an extension of no
more than two years.
If, during the period specified in the preceding two Paragraphs, an industrial entrepreneur
uses the land in violation of the approved expansion plan, the relevant special municipality
or county (city) competent authority shall order the industrial entrepreneur to correct the
situation within a specified time limit. If the industrial entrepreneur fails to correct the
situation within the time limit, the special municipality or county (city) competent authority
shall revoke the original approval, and shall notify the relevant agencies that the land must be
restored to its original zoning designation, and any construction permits or miscellaneous
permits already issued for the land must be revoked.
If an industrial entrepreneur fails to complete utilization of the land during the period
specified in the preceding two Paragraphs, the relevant special municipality or county (city)
competent authority shall revoke the original approval, and shall notify the relevant agencies
that the land must be restored to its original zoning designation, and any constructions
permits or miscellaneous permits already issued for the land must be revoked.
Chapter Twelve – Penalties
Article 67
If the use by an industrial entrepreneur or a state-owned or private sector enterprise violates
the provisions of Paragraphs 2 or 3 of Article 57, the central competent authority may
impose an administrative fine ranging from NT$2 million to NT$10 million.
If an industrial entrepreneur or a state-owned or private sector enterprise violates the
provisions relating to the execution of planning and construction, entry into and exit from the
harbor by vessels, mooring, lay-up, harbor safety, or regulation of industries in the harbor
area contained in the regulations prescribed in accordance with Paragraph 5 of Article 58, the
central competent authority may impose an administrative fine ranging from NT$300,000 to
NT$1,500,000.
Article 67-1
For application of Articles 12-1, 12-2 or 19-1, a company shall, in the year its shareholders
transfer shares or deliver shares by book-entry transfer, or prior to January 31 of the year
after the year of expiration of the tax deferral period, file information regarding the shares
transferred, delivered by book-entry transfer, or shares not yet transferred with the competent
taxation authority in the prescribed format. If the company fails to file such information
before the deadline or files untrue information, the taxation authority shall order it to file a
supplemental report within a time limit and fine the representative of the company at 10
percent of the income that should have been declared or has been omitted, provided that the
fine is not over NT$500,000 and no less than NT$50,000. Where a company voluntarily files
the information after the deadline, the fine shall be reduced by 50 percent.
Where a company fails to file a supplemental report on the above information before the
deadline as ordered by the taxation authority, the representative of the company shall be
fined at 15 percent of the income that should have been declared or has been omitted,
provided that the fine is not over NT$1 million and no less than NT$100,000.
Article 67-2
If an enterprise eligible for the tax benefit under Article 23-1 is in one of the
following situations, the taxation authority shall impose penalties according to the relevant
Subparagraph:
- Where the enterprise fails to file an annual income tax return within the prescribed
period set forth in Article 71 of the Income Tax Act, but subsequently files the annual income
tax return in accordance with Paragraph 1, Article 79 of the Act, it shall pay a delinquent
reporting surcharge equal to 10 percent of the tax calculated at the profit-seeking enterprise
income tax rate applicable in the current year on its annual income determined by the
taxation authority through investigation. The amount of the delinquent reporting surcharge
shall not exceed NT$30,000 but shall not be less than NT$1,500.
- Where the enterprise further fails to file an annual income tax return within the time
limit prescribed in Paragraph 1, Article 79 of the Income Tax Act, it shall pay a late filing fee
equal to 20 percent of the tax calculated at the profit-seeking enterprise income tax rate
applicable in the current year on its annual income determined by the taxation authority
through investigation. The amount of the late filing fee shall not exceed NT$90,000 but shall
not be less than NT$4,500.
- Where the enterprise has filed an annual income tax return, or its final report on total
business income or income earned from liquidation, but has under-declared or omitted to
declare any income, it shall pay a fine of up to two times the tax calculated at the
profit-seeking enterprise income tax rate applicable in the current year on the income it has
under-declared or omitted to declare.
- Where the enterprise fails to file an annual income tax return, or its final report on total
business income or income earned from liquidation in accordance with the Income Tax Act,
and the taxation authority finds through investigation that the enterprise has under-declared
or omitted to declare its taxable income assessed in accordance with the Act, it shall pay a
fine of up to three times the tax calculated at the profit-seeking enterprise income tax rate
applicable in the current year on the income it has under-declared or omitted to declare.
- Where the enterprise fails to calculate each partner’s income from seeking profits in
proportion to the earnings distributed to the partner in accordance with Paragraph 2, Article
28 of the Limited Partnership Act, it shall pay a fine equal to five percent of the difference
between the amount of income calculated by the enterprise and the amount of income
calculated in accordance with the applicable proportion. The fine shall not exceed
NT$300,000 but shall not be less than NT$15,000.
- Where the enterprise fails to file the documents under Paragraph 7 of Article 23-1 before
the given deadline or makes any false statements in such documents, it shall pay a fine of
NT$7,500 and file the documents or correct the statements within a time limit set forth in a
notice. If it still fails to file the documents or correct the statements within the time limit, it
shall pay a fine equal to 5 percent of the income not duly declared in the documents. The fine
shall not exceed NT$300,000 but shall not be less than NT$15,000.
Under any of the following circumstances, a tax withholder under Paragraph 8, Article 23-1
shall be subject to the applicable punishment set forth below.
- Where the tax withholder fails to withhold tax in accordance with Paragraph 8, Article
23-1, it shall be given a time limit for paying the tax not withheld or under-withheld and
filing a supplemental tax-withholding certificates and shall also pay a fine of up to the
amount of the tax that should have been withheld or was under-withheld. If the tax
withholder fails to pay the tax amount it should have withheld or it under-withheld, or to
submit correct tax-withholding certificates within the given time limit, it shall pay a fine of
up to three times the tax amount which should have been withheld or was under-withheld.
- A tax withholder who has withheld taxes in accordance with Paragraph 8, Article 23-1
but fails to file a truthful tax withholding return or issue a truthful tax-withholding certificate
within the time limit prescribed in the same paragraph shall be given a time limit for
supplementally filing the return or issuing the certificate and shall pay a fine at 20 percent of
the tax amount withheld. The amount of the fine, however, shall not exceed NT$20,000 or be
less than NT$ 1,500. If the return is filed or the certificate is issued after the deadline as a
result of the tax withholder’s own initiative, the fine shall be reduced by 50 per cent. If a tax
withholder fails to file a truthful tax withholding return or issue a truthful tax-withholding
certificate within a time limit as demanded by the tax authority, the tax withholder shall pay
a fine of up to three times the amount of the tax withheld. The amount of the fine, however,
shall not exceed NT$ 45,000 or be less than NT$ 3,000.
A tax withholder who fails to pay the withheld tax within the time limit prescribed in
Paragraph 8, Article 23-1 shall pay a surcharge for delinquent payment at one per cent of the
amount of the payment due for every two days of delay.
Chapter Thirteen - Supplementary Provisions
Article 68
This Statute shall also apply to industrial land and industrial districts designated as such in
accordance with the former Act for the Encouragement of Investment or the former Statute
for Upgrading Industries before this Statute comes into force.
Article 69
With regard to business entities that do not conform to the definition of “companies” and
“enterprises” given in Article 2 of this Statute, if they are recognized by the central
authorities in charge of relevant enterprises, the provisions of Articles 9, 13, 14, 16 and 26 to
28 of this Statute regarding incentives, grants, or guidance may apply mutatis mutandis to
them.
Article 70
Anyone having received tax reductions, incentives, or grants under other laws or regulations
shall not receive incentives or grants provided by this Statute for the same matters.
If a company or enterprise has committed a material violation of any law governing
environmental protection, labor, or food safety and sanitation in the past three years, and
such violation has been confirmed by the central authority in charge of the relevant
enterprises, the company or enterprise shall not apply for any of the incentives or grants
under this Statute and shall return any and all the incentives or grants received in accordance
with this Statute during the period of such violation.
Where an incentive or grant has to be recovered in accordance with the preceding paragraph,
the central authority in charge of the relevant enterprises shall publish the name of the
company or enterprise on its official website after the decision on the recovery becomes
final. Where tax benefits granted to a company or enterprise in accordance with this Statute
have been terminated or recovered in accordance with Paragraph 2, Article 48 of the Tax
Collection Act, the Ministry of Finance shall publish the name of the company or enterprise
in the year after the ruling on termination and recovery becomes final, and such publication
is not subject to the restrictions under Article 33 of the Tax Collection Act.
Article 71
The enforcement rules of this Statute shall be prescribed by the central competent authority.
Article 72
This Statute shall come into force on the date of promulgation. However, implementation of
Article 10 shall be from January 1, 2010, to December 31, 2019.
The amended Articles of this Statute shall be implemented from the date of promulgation.
However, Article 10, 12-1 and 19-1 as amended on December 15, 2015, shall be
implemented from January 1, 2016 to December 31, 2019; Article 10, 12-1, 12-2, 19-1, and
23-2 as amended on November 3, 2017, and Article 19-1 as amended on May 29, 2018, shall
be implemented until December 31, 2019. |