萬國法律事務所

An amendment to the Income Tax Act, which would lower the corporate income tax rate from 20 to 17 percent, was passed by the legislature with a 42-32 vote on 28 May 2010. The amendment is expected to greatly benefit traditional industries as well as small and medium-sized enterprises operating in Taiwan. It is estimated that the Government will incur a loss of revenue in excess of NT$ 30 billion this year as a result of the cut.

The amendment to the Income Tax Act aims to accommodate the Industrial Innovation Act passed this April, several measures of which are designed to provide incentives to enterprises to engage in industrial innovation as well as job creation by granting tax benefits and subsidies from the Government. With the passage of the amendment this time, the reformation of the industrial innovation related laws is said to be completed.

The Industrial Development Bureau (IDB) of the Ministry of Economic Affairs stressed the positive effect of the reduction of corporate income tax on the business environment in Taiwan. According to the IDB, the alleviation of the tax burden for all profit-seeking companies will not only help to lure foreign funds into the Taiwan market but will also place traditional industries and small and medium-sized enterprises on a more equal footing with high-tech companies.