新市鎮產業引進稅捐減免獎勵辦法

The Regulations are enacted pursuant to Paragraph 4, Article 24 of the New Town Development Act (hereinafter referred to as “the Act”).

1The total investment mentioned in Subparagraph 1, Paragraph 1, Article 24 of the Act refers to the total investment in the brand-new machines, equipment and buildings that are actually purchased for operating according to the investment plan approved by the development authority and for which investment allowance is not applicable, after government subsidies are deducted, and is subject to the amount approved by the tax authority.

2The reduction of the profit-seeking enterprise income tax credit of that very year as mentioned in Subparagraph 1, Paragraph 1, Article 24 of the Act refers to the deducted tax payable calculated by the tax deduction and tax authority according to the operating revenue of the very year and the additional tax payable for the undistributed surplus for the previous year at the tax rate prescribed by the Income Tax Act as approved by the tax authority.

3The commencement of operating mentioned in Subparagraphs 1 and 2, Paragraph 1, Article 24 of the Act refers to the day when the investment plan approved by the development authority is finished.

4In Subparagraph 2, Paragraph 1, Article 24 of the Act, the land refers to the land directly used by this industry after the Business Registration Certificate and Factory Registration is finished according to the law; and the price for selling the land used for the original business shall employ the land value upon which the land value increment tax is levied for the transfer; the price of the re-purchased land shall employ the land value upon which the land value increment tax is levied from the original owner for the transfer.

5Purchase as mentioned in Paragraph 1 includes purchase from others, acquisition under financial lease, manufacture (including construction) by oneself or commissioned by others, and for one's own use.

6Acquisition under financial lease as mentioned in the preceding paragraph means that a company takes a lease of machines, equipment, or buildings under one of the following circumstances.

71. When the lease expires, the ownership of the machines, equipment or buildings is transferred to the lessee.

82. The lessee may exercise an option to purchase the leased machines, equipment, or buildings during the lease term at a price that is significantly less than the fair value of the machines, equipment, or buildings on the date the option is exercised.

93. The lease term is three quarters of the economic life of the leased machines, equipment, or buildings.

104. The present value of the minimum lease payments at the inception date of the lease is 90% of the fair value of the leased machines, equipment, or buildings.

115. There is other sufficient evidence proving that the risks and rewards attached to the ownership of the leased machines, equipment or buildings have been transferred.

Areas for which tax reduction is applicable under Paragraph 1, Article 24 of the Act shall be allocated by the development authority within the areas that have been planned and arranged in new town special districts according to the necessity for introducing industries.

1An applicant who applies for tax reduction under Subparagraph 1, Paragraph 1, Article 24 of the Regulations (hereinafter referred to as “applicant”) shall meet the following conditions:

21. It is a joint stock company limited invested and established or extended after the development authority announces the allocated range, which has established branch companies in the aforesaid range and is engaged in the industries favorable for development of new towns defined by the Executive Yuan.

32. It has no significant violations of environmental, labor, or food safety or health laws in the last three years.

1After the development authority has announced the allocated range according to Article 3, an applicant shall work out an investment plan within the following time limit and submit it to the authority for approval (late submission will not be accepted):

21. For a newly invested and established company, it shall work out the investment plan within six months from the date of registration of its incorporation.

32. For a company that is extended by capital increase, it shall work out the investment plan within six months from the date of capital increase and registration of the incorporation of the branch company.

4The aforesaid investment plan shall include the following contents:

51. Applicant information.

62. Objectives of the plan.

73. Business items.

84. Specifications, quantities and currency amounts of the brand-new machines, equipment, and buildings to be purchased and buildings for the registration of incorporation of companies.

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1An applicant shall submit the relevant certificates of the brand-new machines, equipment, and buildings purchased within six months commencing from the beginning of operating to the original competent development in charge of approval, to apply for investment allowance certificate for joint stock companies limited to invest in new town special areas (hereinafter referred to as “investment allowance certificate”). If the applicant does not apply for the certificate within the aforesaid time, the originally approved investment plan shall lose its validity.

2Format of the above-mentioned investment allowance certificate shall be determined by the central authority.

1After an applicant begins operating, the profit-seeking enterprise income tax credit payable of that very year may be deducted in accordance with the following provisions. In case the income tax amount of that very year is insufficient for deduction, it may be deducted within four consecutive years followed.

21. For anyone who applies for the approval and issuance of the investment allowance certificate within five years from the date of announcing the allocated range as mentioned in Article 3, the profit-seeking enterprise income tax credit payable of that very year shall be deducted by 15% of the total investment.

32. The above-mentioned reduction of tax will be reduced by a half where application is submitted to the authority to apply for investment allowance certificate in the sixth to the tenth year commencing from the date of announcing the allocated range as mentioned in Article 3.

4No preference will be offered where application is submitted to the authority to apply for investment allowance certificate since the 11th year commencing from the date of announcing the allocated range as mentioned in Article 3.

1In case of alteration of an investment plan, the applicant shall submit application for alteration to the original development authority in charge of approval before the predetermined date of completing the plan. It is allowable that no application is submitted for alteration of matters specified in Subparagraph 4, Paragraph 2, Article 5, and the cumulative altered currency amount is less than NTD 1 million, but explanation shall be made upon applying for the investment allowance certificate.

2Where application for alteration to the investment plan already approved is not submitted according to the preceding paragraph, the development authority may grant the investment allowance certificate for the finished proportion according to the original investment plan already approved.

3The development authority shall notify the tax authority at the location of the applicant of the approval, any change in the approval of investment plan or issuance of investment credit certificate.

1Investment allowance is only applicable to the machines, equipment or buildings purchased by applicants after the development authority accepts the investment plan to the date before the commencement of operation. However, investment allowance is also applicable to buildings purchased by applicants for registration of incorporation of companies after the allocated range is announced and before the development authority accepts the investment plan.

2The above-mentioned machines and equipment include the following:

31. Productive goods or machines and equipment required for provision of service.

42. Instruments and equipment required for quality test or research and development.

53. Equipment required for pollution control and energy saving.

64. Firefighting equipment in factory areas.

75. Industrial safety and hygiene equipment.

86. Loading, unloading, stacking and transportation equipment.

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1Upon settlement and declaration of the profit-seeking enterprise income tax of that very year, the applicant shall fill in the investment allowance items in accordance with the format prescribed by the Ministry of Finance, attach the form to the investment allowance certificate and the relevant supporting documents for the purchased machines, equipment, and buildings and submit them to the local tax authority to apply for reduction of the profit-seeking enterprise income tax credit.

2In case of any omission to the data required to be filled in by the applicant or to the documents to be attached in accordance with the preceding paragraph, the tax authority shall notify the applicant to make supplement and corrections before deadline. If the applicant fails to make supplement and corrections before the deadline or if the supplement and corrections are incomplete, the tax authority shall not accept the application.

1For the machines, equipment, and buildings for which investment allowance is applied under the Regulations, in case of resale, sublease, lending, return, discarding, auction, stealing, recovery by others pursuant to law, change of the original purpose of use or transfer to a place beyond the allocated range prescribed in Article 3 within three years commencing from the next day of issuance of the investment allowance certificate, the applicant shall repay the reduced operating income tax to the tax authority. In addition, the applicant shall pay the interest accrued on a daily basis according to the fixed interest rate for one-year fixed term deposits as postal savings on January 1 of each year, commencing from the next day of expiration date of the settlement and declaration of the reduced profit-seeking enterprise income tax of that very year to the date of payment.

2Disposal of machines, equipment and buildings due to disasters or events of force majeure is not subject to the provisions of the preceding paragraph. The applicant shall submit a list of losses and supporting documents within thirty (30) days from the next day of the occurrence of the fact to the tax authority for investigation; if the applicant fails to submit a list of losses and supporting documents to the tax authority for investigation before the prescribed time but can provide concrete evidence to prove that the losses are real, the applicant shall still submit a list of losses and supporting documents to the tax authority for verification and determination.

3The disaster or event of force majeure referred to in the preceding paragraph shall be governed by the provisions of Paragraph 1, Article 10.1 of the Enforcement Rules for the Income Tax Act.

Where it is found that false declaration occurs when an applicant applies for investment allowance for profit-seeking enterprise income tax credit under the Regulations, and the case will be disposed in accordance with the provision of the Income Tax Act regarding penalties for tax evasion, and the Tax Collection Act regarding the cessation and recovery of preferential rental tax treatment.

1Where a landownership holder purchases a piece of land required for operating in the industry favorable for development of new towns within the range allocated under Article 3, and applies for refund of the land value increment tax already paid according to Subparagraph 2, Paragraph 1, Article 24 of the Act, the landownership holder shall submit the contract documents of the sold and re-purchased land once used for registration at the department of land administration as well as the Photostat copies of the related certificates for refund of tax upon re-purchasing, to the competent tax authority at the location of the originally sold land to apply for disposal.

2Where the re-purchased land is not in a same municipality or county (city) with the sold land, the competent tax authority that deals with the application for refund of tax shall send an official letter to invite the competent tax authority at the location of the re-purchased land to verify the documents before to handle the case, and shall inform the competent tax authority at the location of the re-purchased land about the related data after the application for tax refund is approved.

3Every year the competent tax authority shall keep a record of and periodically inspect the above-mentioned cases for which refund of tax is approved. In case it is found the re-purchased land is transferred again or it is deemed that the land is turned to industries beyond the range of encouragement within five years as determined by the relevant competent authorities, the originally refunded land value increment tax shall be refunded.

Where the landownership holders apply for refund of land value increment tax already paid according to Subparagraph 2, Paragraph 1, Article 24 of the Act, the sale of the land used for the original business is limited to the land that is not leased and is still used for operating within one year before sale.

The Regulations will take effect upon promulgation.