The Ministry of Finance has received three applications since a repatriation bill took effect on Aug. 15, with one corporate applicant applying to repatriate more than NT$300 million (US$9.59 million), the ministry said yesterday.
The first two applications were submitted to the National Taxation Bureau of the Central Area last month, with one individual and a firm each seeking to repatriate tens of millions of New Taiwan dollars, the Taxation Administration told the Taipei Times.
The National Taxation Bureau of Taipei on Wednesday received the third application, with the applicant planning to spend some of the NT$300 million on domestic investment, Taipei bureau Director-General Hsu Tzu-mei (許慈美) said by telephone.
“It will take 10 days for the bureau to complete its review and decide whether to approve the applications,” Hsu said.
The bureau would scrutinize the applicants’ qualifications within three days, while banks that help applicants open special accounts to deposit the repatriated fund would check for breaches of money laundering regulations within seven days, Hsu said.
As Taiwanese companies can only repatriate funds owned by offshore companies in which they hold at least a 20 percent stake, the bureaus would examine their shareholding structures, Taxation Administration Deputy Director-General Lee I-hui (李怡慧) said by telephone.
Once approved, applicants have to repatriate the funds into the special accounts within one month, from which banks would deduct the preferential income tax of 8 percent rate immediately, compared with a regular corporate income tax rate of 20 percent, Lee said.
The ministry has estimated capital inflows of NT$266.6 billion to NT$1.78 trillion within two years from the bill taking effect, or Aug. 14, 2021, she said.
More applications are expected this year, Lee said.
“It seemed to be that many companies were hesitant over whether to send money home, as they had concerns over interest income from domestic investment,” Deloitte & Touche Taiwan tax and law specialist Lin Ye-hsin (林宜信) said at an event in Taipei.
As companies are required to park their funds in the special accounts for five years once an application is approved, they want to find investment targets that offer satisfactory returns before making a move, Lin said.
Companies are only allowed to invest 25 percent of the repatriated funds in financial ventures in addition to 5 percent at their own disposal, which means that they would need to invest the rest elsewhere if they do not want money sitting idle in the bank, Lin said.
“Companies are looking for cash cows to make a lot of money over a long period, but for now, they are still waiting for good opportunities,” Lin said.
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