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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:
1. Company: A company incorporated in accordance with the provisions of the Company Act.
2. Limited partnership: A juridical person organized and registered pursuant to the Limited
Partnership Act.
3. Enterprise: A sole proprietorship, partnership, limited partnership, company, or farmers’
organization that has been registered in accordance with the law.
4. 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 revenue, recusal, and disclosure of relevant
information shall be prescribed by the central competent authority in consultation with the authority
in charge of each of such state-owned enterprise.
The preceding six paragraphs shall not apply to a state-owned enterprise under either of the
following circumstances:
1. The enterprise is not a corporate entity.
2. The enterprise is established to protect depositors’ rights and interests, maintain credit order, and
promote the sound development of financial business.
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 to achieve smart upgrade transformation and to
encourage application of diversified innovations, where a company or limited partnership has not
committed severe violation of any environmental protection, labor, or food safety or sanitation laws
in the past three years, and has invested in the hardware, software, technology or technical services
in connection with brand-new smart machines or introduction of 5th-generation mobile networks for
its own use between January 1, 2019 and December 31, 2024 or in connection with cyber security
products or services for its own use between January 1, 2022 and December 31, 2024, with
expenditure of more than NT$1 million and under NT$1 billion in the same taxable year, may select
one of the following credits against the payable profit-seeking enterprise income tax; once selected,
it cannot be changed. Each annual investment creditable amount shall not exceed 30 percent of the
payable profit-seeking enterprise income tax in the then-current year:
1.Up to five percent of the expenditure may be credited against the payable profit-seeking enterprise
income tax in the then current year.
2.Up to three percent of the expenditure may be credited against the payable profit-seeking
Enterprise’s income tax in each of the three years from the then-current year.
Where a company or limited partnership is concurrently applicable in the same year for the
investment credit under the preceding paragraph and other types of investment credit, the total
amount creditable in the then-current year shall not exceed 50 percent of the payable profit-seeking
enterprise income tax of the then-current year, unless other laws govern the then-current year is the
final creditable year and there is no limitation on the creditable amount.
The term smart machines under Paragraph 1 refers to smart technology elements that utilize big data,
artificial intelligence, Internet of things, robots, lean management, digital management, clicks and
mortar, additive manufacturing or sensors, and having smart functions that produce information
visualization, fault prediction, accuracy compensation, automatic parameter setting, automatic
control, automatic scheduling, application service software, flexible production, or mixed-model
production.
The term 5th-generation mobile networks under Paragraph 1 refers to 5G-related technological
elements, equipment (including equipment needed for testing) or vertical application systems that
utilize MF/HF communications meeting the specifications of 3rd Generation Partnership Project
Release 15, large numbers of antenna arrays, network slicing, network virtualization,
software-defined networking and edge computing to increase production efficacy or to provide
smart servicess.
The term cyber security products or services under Paragraph 1 refers to the hardware, software,
technology or technical services used in connection with the safeguard of terminal and mobile
devices, maintenance of network security and/or the maintenance of data and cloud security to
prevent information and communication system or information from unauthorized access, use,
control, disclosure, damage, alteration, destruction or other infringement to assure its confidentiality,
integrity and availability.
A company or limited partnership applying for investment credit applicable 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, and may apply only once in each
taxable year.
The scope of applicability, investment schemes capable of generating certain effects, application
deadline, application procedure, authority granting approval, tax credit rate, calculation of the total
creditable amount in the then-current year, and other related matters for investment credit in smart
machines, 5th-generation networks or cyber security products or services under the preceding six
paragraphs shall be prescribed by the central competent authority in consultation with the Ministry
of Finance.
Article 10-2
To strengthen the international competitive advantage of industries and reinforce domestic
industries’ foothold on the global supply chain, a company that engages in technological innovation
in Taiwan, occupies a key position in the international supply chain, and meets the following
conditions may enjoy a tax credit of 25% of the amount that it spends on the forward-looking
innovative R&D against its profit-seeking enterprise income tax payable in the then-current year, up
to 30% of the amount of the profit-seeking enterprise income tax payable in the then-current year:
1.The amount of the company’s R&D expenses and the percentage of such expenses to its net
operating revenues for the same taxable year reach certain thresholds.
2.The effective tax rate applicable to the company in the then-current year is not lower than a certain
percentage.
3.The company has not committed any severe violation of any environmental protection, labor, or
food safety and sanitation laws in the past three years.
Where a company meets the requirements specified in the preceding Paragraph and the amount that
it spends on the purchase of new machinery or equipment for its own use in advanced
manufacturing processes reaches a certain threshold, the company may enjoy a tax credit of 5% of
such amount against its profit-seeking enterprise income tax payable in the then-current year, up to
30% of the amount of the profit-seeking enterprise income tax payable in the then-current year.
Where a company has applied and been approved for the investment credit under Paragraph 1, none
of its R&D expenditures in the then-current year can enjoy the income tax credits or reductions
provided for the purpose of encouraging the R&D under Article 10 or Paragraph 1, Article 12-1 of
this Statute and other laws; where a company has applied and been approved for the investment
credit under the preceding Paragraph, none of its expenditures for the purchase of machinery and
equipment in the then-current year can enjoy the income tax credits or reductions for investment in
machinery or equipment under the preceding Article and other laws.
Where a company has applied and been approved for both the investment credits under Paragraphs
1 and 2 or is concurrently applicable for such investment credits and any other investment credits
under this Statute or other laws in the same year, the total amount creditable in the then-current year
shall not exceed 50% of its profit-seeking enterprise income tax payable in the then-current year,
unless, under other laws, the then-current year is the final creditable year and there is no limitation
on the creditable amount.
The effective tax rate referred to in Subparagraph 2, Paragraph 2 shall mean the percentage of the
amount of the tax payable by a company in the then-current year as calculated pursuant to
Paragraph 1, Article 71 of the Income Tax Act, after deducting the tax reductions for the income tax
paid on overseas income in the country of origin under the tax laws of that country, the tax
reductions for the income tax already paid in the People’s Republic of China (PRC) or any third area
on PRC-sourced income, and the investment credits under this Statute and other laws, to its annual
income; such percentage shall be 12% for 2023 and 15% from 2024 onwards; however, the
percentage for 2024 may be adjusted to 12% based on the review by the central competent authority
in conjunction with the Ministry of Finance of how the international community enforces the
Organization for Economic Cooperation and Development’s Global Minimum Corporate Tax; such
adjustment shall be subject to the approval of the Executive Yuan before being promulgated by the
central competent authority in conjunction with the Ministry of Finance.
The scope of applicability, eligibility requirements, thresholds, application deadline, application
procedure, authority granting approval, calculation of the total creditable amount in the then-current
year, and other related matters for the investment credits under the preceding five Paragraphs shall
be determined by the central competent authority in conjunction 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 a domestic
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 investment tax credit under Article 10.
Where a domestic 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 taxable income in the year such shares are acquired. Once a choice of 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 taxable income 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
gift 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.
Where a domestic individual has opted to exclude the new shares acquired as the consideration from
his/her taxable income in the year such shares are acquired in accordance with the preceding
paragraph, and has held such shares and provided services regarding application of the intellectual
property rights under the preceding paragraph to the company issuing those shares accumulatively
for two years, if the shares are transferred or are delivered by book-entry transfer to an account with
a securities depository enterprise, and the entire transfer price, the market price of the shares at the
time of gift or distribution as estate, or the market price of the shares on the date of book-entry
transfer is higher than the acquisition price of the shares, the acquisition price of the shares shall be
included in the revenue for the year of transfer or book-entry transfer and be declared for
assessment of income tax. Where a domestic individual has not declared the price of the shares for
assessment of income tax or has declared the price for assessment of income tax but cannot provide
documentary proof of the acquisition price of the shares, and the information is not available from
the taxation authority, the above provisions shall not apply.
The transfer under the preceding two paragraphs refers to purchase, sale, gift, 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, 2 or 3 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 the gift 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.
Where a domestic individual intends to apply for the tax benefit under Paragraph 3, the company
issuing those shares shall submit documents prepared in the prescribed format to explain the
services regarding application of the intellectual property rights provided by the individual to the
company to the central authority in charge of the relevant enterprises for recognition when it applies
for the certification under the preceding paragraph. In the year when the individual has held the
shares and provided services regarding application of the intellectual property rights to the company
for two years, the company shall submit documents proving the individual’s shareholding and
services mentioned above 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 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
formats, the application deadlines and procedure, and the formats of the required documents under
Paragraphs 6 and 7 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 Paragraphs 2 and 3,
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 in return, and distributes such shares to the domestic creator of
such intellectual property rights in accordance with Paragraph 3, Article 6 of the Fundamental
Science and Technology Act, such domestic 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 chosen, 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 gift 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.
Where a domestic creator has opted to exclude the acquired new shares from his/her taxable income
in the year such shares are acquired in accordance with the preceding paragraph, and has held such
shares and worked and carried out research and development at an industry or an academic or
research institution within the territory of the R.O.C. accumulatively for two years, if the shares are
transferred or are delivered by book-entry transfer to an account with a securities depository
enterprise, and the entire transfer price, the market price of the shares at the time of gift or
distribution as estate, or the market price of the shares on the date of book-entry transfer is higher
than the market price of the shares at the time they are acquired by the creator, the market price of
the shares at the time they are acquired by the creator shall be included in the creator’s revenue for
the year of transfer or book-entry transfer, and be declared for assessment of income tax. Where an
R.O.C. creator has not declared the price of the shares for assessment of income tax or has declared
the price for assessment of income tax but cannot provide documentation proof of the market price
of the shares at the time they are acquired by the creator, and the information is not available from
the taxation authority, the above provisions shall not apply.
The assignment under the preceding two paragraphs refers to purchase, sale, gift, 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 a domestic creator 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 property rights derived from an academic or research institution’s own
R&D achievements in accordance with Paragraph 1 and conferred on the institution in accordance
with Paragraph 1, Article 6 of the Fundamental Science and Technology Act, the rules for
recognition of the shares distributed to domestic creators in accordance with Paragraph 3, Article 6
of the Fundamental Science and Technology Act, the rules for recognition of working and carrying
out research and development at an industry or an academic or research institution within the
territory of the R.O.C. under Paragraph 2, the formats of the documents, the application procedure
and the required documents under the preceding paragraph, and other related matters 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
domestic creators under Paragraphs 1 and 2, 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:
1. Establishment of information service systems to provide information relating to the circulation of
intellectual property.
2. Provision of information relating to value addition and combination of intellectual property.
3. 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:
1. 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.
2. Integration of supply and demand data relating to industrial human resources, and formulation of
industrial human resource development strategies.
3. Coordination of matters relating to the promotion of industrial human resources development.
4. 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 chosen, it cannot be
reversed. However, where an employee has opted to exclude the acquired shares from the annual
taxable income in the year such shares are acquired or the year of the day such shares become
disposable, 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 gift or
distribution as estate, or the market price of the shares on the date of book-entry transfer shall be
deemed the employee’s 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.
Where a company employee has opted to exclude a certain worth of the acquired shares from
his/her annual taxable income in the year such shares are acquired or the year of the day the
acquired shares become disposable in accordance with the preceding paragraph, and has held the
shares and continued to work at the company accumulatively for two years from the day the shares
are acquired, if 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 gift
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 acquired or become disposable, the market price on
the day the shares are acquired 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 the price of the shares for
assessment of income tax or has declared the price for assessment of income tax but cannot provide
documentary proof of the market price on the day the shares are acquired or become disposable, and
the information about the market price on the day the shares become disposable is not available
from 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 or
more years accumulatively, 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 is held or over 50 percent of
whose total capital is contributed by the company granting the stock-based employee compensation.
2. A company that holds over 50 percent of the total issued voting shares or contributes over 50
percent of the 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 a director or a supervisor of the company granting
the stock-based employee compensation:
1. An employee of the company that gives stock-based compensation to its employees.
2. An employee of a company over 50 percent of whose total issued voting shares or total capital is
held or contributed by the company granting the stock-based employee compensation in accordance
with the Company Act or the Securities and Exchange Act.
3. An employee of a company that holds over 50 percent of the total issued voting shares or
contributes over 50 percent of the total capital of the company granting the stock-based employee
compensation in accordance with the Company Act or the Securities and Exchange Act.
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 subject to 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 continuously, submit documents proving that
the employee has held the shares and continued to work at the company continuously for two or
more years accumulatively 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 through 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.
Chapter Six - Promoting Investment in Industry
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 between January 1, 2017 and December 31, 2029 in accordance with the Limited
Partnership Act is eligible for the tax benefit under Paragraph 4.
1. A venture capital enterprise contributing capital annually, meeting the requirements of one of the
following subparagraphs, and from the second year of its establishment, using each year’s funds
equal to at least 50% of the aggregate capital contributions substantially 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:
(1) In the year of establishment and the second year: The total capital to be contributed in
accordance with the limited partnership agreement reaches NT$300 million as of the last day of the
respective year.
(2) In the third year of establishment: The aggregate capital contribution substantially received by
the venture capital enterprise reaches NT$100 million as of the last day of the year.
(3) In the fourth year of establishment: The aggregate capital contribution substantially received by
the venture capital enterprise reaches NT$200 million as of the last day of the year, and the
accumulated sum invested by it 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) In the fifth year of establishment: The aggregate capital contribution substantially received by
the venture capital enterprise reaches NT$300 million as of the last day of the year, and the
accumulated sum invested by it 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.
2. A venture capital enterprise receiving an aggregate capital contribution of NT$300 million or
more in the year of incorporation, meeting the requirements of one of the following subparagraphs,
and from the second year of establishment, using each year’s funds equal to at least 50% of the
pre-decided aggregate capital contribution for 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 government’s policy as approved by the central
competent authority on a yearly basis:
(1) In the year of establishment and the second year: The aggregate capital contribution received
reaches NT$300 million as of the last day of the year.
(2) In the third year of establishment: The pre-decided aggregate capital contribution amounts to
NT$100 million as of the last day of the year.
(3) In the fourth year of establishment: The pre-decided aggregate capital contribution amounts to
NT$200 million as of the last day of the year, and the accumulated investment in innovative startups
amounts to 30 percent of the enterprise’s pre-decided aggregate capital contribution for that year or
NT$300 million.
(4) In the fifth year of establishment: The pre-decided aggregate capital contribution amounts to
NT$300 million as of the last day of the year, and the accumulated investment in innovative startups
amounts to 30 percent of the enterprise’s pre-decided aggregate capital contribution for that year or
NT$300 million.
The pre-decided aggregate capital contribution as referred to in Subparagraph (2) of the preceding
paragraph means the aggregate capital contribution for the preceding year decided by a venture
capital enterprise when applying for the central competent authority’s approval on a yearly basis.
The pre-decided aggregate capital contribution shall not be less than the amount of the enterprise’s
actual investment accumulated from the year of establishment to the last day of the preceding year,
and shall reach the aggregate capital contribution needed for the completion of fundraising before
the expiration of the period in which the enterprise is eligible for the tax benefit under Paragraph 4.
Where an enterprise having been eligible for the tax benefit under Paragraph 4 subsequently goes to
liquidation, the enterprise may be exempt from the restrictions under Paragraph 1 and remains
eligible for the tax benefit under Paragraph 4 during liquidation.
Within ten years from the fiscal year of establishment, 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 profit-seeking income 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 in a profit-seeking enterprise whose head office is not within the
territory of the R.O.C. is exempt from income tax regarding 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, three months before the expiration of the time limit, 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.
An enterprise eligible for the tax benefit under Paragraph 4 shall, during the period of eligibility
under Paragraph 4, 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, and not be required to calculate or pay the payable tax; 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 the purpose of
calculating taxable income, or provisions for any other tax incentives in this Statute or other laws; in
addition, it shall not be required to pay additional profit-seeking income tax on undistributed surplus
earnings under Article 66-9 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.
An enterprise eligible for the tax benefit under Paragraph 4 may calculate the withholding tax
distributable to each partner in a year out of the amount of tax withheld from the enterprise’s income
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. An enterprise eligible for the tax benefit under Paragraph 4 shall, before the
deadline for filing the income tax return, or the current final report on total business income or
income earned from settlement or 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 4 and the above-mentioned withholding tax distributable to the partner,
and attribute such income to the partner’s income for the year in which the settlement date of the
enterprise’s annual accounts, the day for filing its final income tax return for the current period, or
the completion date on which its liquidation process falls.
Where a partner receiving income under Paragraph 4 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 4 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.
To be eligible for the tax benefit under Paragraph 4, an enterprise shall opt for the eligibility for the
tax benefit under Subparagraph 1 or 2 of Paragraph 1 before the end of February in the next year
after its establishment. Once an option is chosen, it cannot be reversed. During the period of
eligibility, 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 4 and shall
pay tax in accordance with the Income Tax Act and the Basic Income Tax Act from the year it loses
eligibility.
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 4 acquired new shares issued by the company.
A foreign company conducting its substantial operational activities within the territory of the R.O.C.
under Paragraph 1 or the preceding paragraph 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 recognized 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 actual received capital contributions and the pre-decided
aggregate capital contribution under Paragraph 1, 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 actual received capital contributions received by a limited
partnership or the pre-decided aggregate capital contribution, 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 5; 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 4 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 23-3
To encourage profit-seeking enterprises to use their earnings to make substantial investment or
upgrade production technology or the quality of products or services, if a company or limited
partnership uses a certain amount of its undistributed earnings to construct or purchase buildings,
software or hardware equipment, or technology for use in production or operation as needed for
operation of its business or ancillary business within three years from the year after such earnings
are derived, such investment amounts may be deducted from the undistributed earnings in
calculation of the current year’s undistributed earnings for assessment of additional profit-seeking
enterprise income tax leviable on undistributed earnings from the year 2018 under Article 66-9 of
the Income Tax Act.
When a company or limited partnership eligible for the tax benefit under the preceding paragraph
declares its undistributed earnings in accordance with Article 102-2 of the Income Tax Act, it shall
enter the data on the prescribed forms and submit documents proving such investment to the local
taxation authority.
Where a company or limited partnership eligible for the tax benefit under Paragraph 1 completes the
investment after it has paid the additional profit-seeking enterprise income tax on its undistributed
earnings, it shall apply to the local taxation authority for recalculation of its undistributed earnings
for that year and refund of the overpaid tax by filing the prescribed forms and submitting documents
proving such investment in accordance with Paragraph 1.
Regulations for the amounts of undistributed earnings under Paragraph 1, the prescribed forms and
documents proving investment under Paragraph 2, the procedure for applying for refund of overpaid
tax, and the documents needed to be submitted under the preceding paragraph, and other related
matters shall be prescribed by 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:
1. Assisting enterprises in adapting to international regulations for environmental protection and
health and safety.
2. Promoting the development and application of technology relating to greenhouse gas reduction
and pollution prevention.
3. 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.
4. 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:
1. 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.
2. 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.
3. To assist the central authorities in charge of relevant enterprises in handling investment, financing,
or technology collaboration expenditure relating to relevant projects.
4. 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.
5. 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 in consultation with the central authorities in charge of relevant enterprises.
Article 40
(deleted)
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:
1. 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.
2. 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.
1. 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.
2. 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:
1. 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.
2. 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:
1. 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.
2. 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:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
1. 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.
2. 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.
3. 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.
Amended Article 10, 12-1 and 19-1 as promulgated on December 30, 2015, shall be implemented
from January 1, 2016 to December 31, 2019.
Amended Articles 12-1, 12-2, and 19-1 as promulgated on November 22, 2017, shall be
implemented from November 24, 2017 to December 31, 2019, while Articles 10 and 23-2 shall be
implemented from November 24, 2017 to December 31, 2029.
Amended Article 19-1 as promulgated on June 20, 2018, shall be implemented from June 22, 2018
to December 31, 2019.
Amended Articles 12-1, 12-2, and 19-1 as promulgated on July 24, 2019, shall be implemented from
January 1, 2020 to December 31, 2029, while Article 23-3 shall be effective from the date of
promulgation to December 31, 2029.
The Articles amended on January 7, 2023 shall be implemented from January 1, 2023 to December
31, 2029. |