Taiwanese firms with operations in the UK might have to pay higher taxes if Britain fails to secure favorable trade terms during the process of leaving the EU, accounting and consulting firm PricewaterhouseCoopers (PwC) Taiwan said yesterday.
The exit negotiations might take two-and-a-half years and Taiwanese firms should reconsider their expansion plans in the UK and the EU as a whole to avoid negative effects, PwC Taiwan financial services leader Richard Watanabe (吳偉臺) said.
Of the 50 companies making the Taiwan 50 Index — an exchange-traded fund that tracks large-cap companies in Taiwan — 11 have subsidiaries or branches in the UK, making them susceptible to higher business and capital gains taxes as the Brexit drama pans out, Watanabe said.
Most of the companies are engaged in sales of consumer electronic products, while some supply auto parts, Watanabe said, adding that PwC’s calculations do not include financial service providers.
Taiwanese banks have six outlets in Britain and one each in France, the Netherlands and Belgium, PwC data showed.
EU member states enjoy free movement of goods, people and capital, and the right to establish, provide or receive services in other member states.
That means there is no business tax or extra licenses for UK-based operations setting up new offices within the EU, said Paulson Tseng (曾博昇), a tax services partner at PwC Taiwan.
“The benefits come as a package, and Britain cannot keep what it wants and drop the rest,” he said.
Stock dividend, business and import taxes could rise to 15 percent or higher for firms in the UK depending on the outcome of the negotiations, Tseng said, adding that uncertainty alone could dampen investment interest.
Investments in the UK by Taiwanese firms amounted to US$2.94 billion as of May, while investments by British firms in Taiwan totaled US$7.96 billion.
“Those firms should take an inventory of their UK exposure,” said Liang Hung-lieh (梁鴻烈), a legal partner at PwC Taiwan.
If they use the UK as a stepping stone to reach the EU market, the strategy might need reconsideration due to potential trade barriers, Liang said.
The impact would be negligible if the UK is their intended destination, he added.
LIMITED IMPACT: Investor confidence was likely sustained by its relatively small exposure to the Chinese market, as only less advanced chips are made in Nanjing Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) saw its stock price close steady yesterday in a sign that the loss of the validated end user (VEU) status for its Nanjing, China, fab should have a mild impact on the world’s biggest contract chipmaker financially and technologically. Media reports about the waiver loss sent TSMC down 1.29 percent during the early trading session yesterday, but the stock soon regained strength and ended at NT$1,160, unchanged from Tuesday. Investors’ confidence in TSMC was likely built on its relatively small exposure to the Chinese market, as Chinese customers contributed about 9 percent to TSMC’s revenue last
With this year’s Semicon Taiwan trade show set to kick off on Wednesday, market attention has turned to the mass production of advanced packaging technologies and capacity expansion in Taiwan and the US. With traditional scaling reaching physical limits, heterogeneous integration and packaging technologies have emerged as key solutions. Surging demand for artificial intelligence (AI), high-performance computing (HPC) and high-bandwidth memory (HBM) chips has put technologies such as chip-on-wafer-on-substrate (CoWoS), integrated fan-out (InFO), system on integrated chips (SoIC), 3D IC and fan-out panel-level packaging (FOPLP) at the center of semiconductor innovation, making them a major focus at this year’s trade show, according
DEBUT: The trade show is to feature 17 national pavilions, a new high for the event, including from Canada, Costa Rica, Lithuania, Sweden and Vietnam for the first time The Semicon Taiwan trade show, which opens on Wednesday, is expected to see a new high in the number of exhibitors and visitors from around the world, said its organizer, SEMI, which has described the annual event as the “Olympics of the semiconductor industry.” SEMI, which represents companies in the electronics manufacturing and design supply chain, and touts the annual exhibition as the most influential semiconductor trade show in the world, said more than 1,200 enterprises from 56 countries are to showcase their innovations across more than 4,100 booths, and that the event could attract 100,000 visitors. This year’s event features 17
Hon Hai Precision Industry Co (鴻海精密), which assembles servers for Nvidia Corp, yesterday said that revenue last month rose 10.61 percent year-on-year, driven by strong growth in cloud and networking products amid continued front-loading orders for artificial intelligence (AI) server racks. Consolidated revenue expanded to NT$606.51 billion (US$19.81 billion) last month from NT$548.31 billion a year earlier, marking the highest ever in August, the company said in a statement. On a monthly basis, revenue was down 1.2 percent from NT$613.86 billion. Hon Hai, which is also a major iPhone assembler, added that its electronic components division saw significant revenue growth last month, boosted
RSS