2003-02-03

BIOTECH FIRMS OFFERED AN INVESTMENT

In another move to further encourage biotechnology firms to invest in research and development in Taiwan, Taiwan’s Ministry of Economic Affairs promulgated its new “Investment Tax Credit Guidelines for Spending by Biopharmaceutical Companies on Research and Development Commissioned to Domestic Clinical Research Organizations” in November of last year. Biopharmaceutical companies that are developing formulas, preparations, or production processes, and that commission pre-clinical trials, clinical trials, bioavailability tests, bioequivalence tests, and comparison of desolution rates to domestic clinical research organizations, are now eligible to apply for investment tax credits for such spending under the “Regulations Governing Investment Tax Credits for Corporate Spending on Research and Development and Human Resources Development.” These Guidelines will apply retroactively to January 1, 2001.

The Regulations Governing Investment Tax Credits for Corporate Spending on Research and Development and Human Resources Development permit a deduction from the business income tax of thirty percent of spending on research and development and personnel training within the current tax year. For companies that allocate more funds on research and development and personnel training in Taiwan during the current year than their average yearly expenditure for the same purposes during the preceeding two years, the deduction is fifty percent of the amount in excess of the two-year average. However, if the amount of business income tax due for the current year is too small to cover the deduction, the deduction may be spread over the succeeding four years.

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