Want Want Group (旺旺集團) yesterday ran a full-page advertisement in its own newspaper, the China Times, asking its peers in the media to stop painting the consortium and 11 other firms as “tax evaders,” and insisting it follows the tax rules when allocating funds.
The advertisement came after local media, including the Taipei Times, cited a two-year investigation by the International Consortium of Investigative Journalists (ICIJ) as saying that Taiwan accounted for the largest number of offshore clients using two firms in the British Virgin Islands as tax havens to hide their wealth.
“It is legal to make money in Taiwan and then move funds or make investments overseas after paying the required taxes,” Want Want said in the ad after local media outlets named the group as one of Taiwanese companies that have used shell companies in the British Virgin Islands to hide their fortunes.
Likewise, it is legal to make profits in China and channel the funds out of the country after paying the required taxes, the ad continued.
According to the ICIJ, others creating a fortune in Taiwan, but wiring the bulk of it abroad include Fubon Group (富邦集團), Ting Hsin International Group (頂新集團), Shin Kong Group (新光集團), King’s Town Construction Co (京城建設), Delta Electronics Inc (台達電), Standard Foods (佳格企業), Koo’s Group (和信集團), CTBC Financial Holding Co (中信集團), United Daily News (聯合報系), Daphne (達芙妮) and GSK Group (全興國際集團).
Want Want is the only enterprise to defend its offshore asset allocations so far.
An estimated NT$280 billion (US$9.23 billion) has being stashed overseas over the past 10 years, the ICIJ investigation revealed.
“Please don’t call the 12 enterprises tax evaders or sinners against Taiwan,” the Want Want ad said.
The ad did not identify or elaborate on the ulterior motive behind the “tax evasion” stories, but suggested that a motive existed.
“Surely, there are reasons behind the revelations,” the ad said, adding that other owners of media outlets and their families also keep offshore accounts and companies, though the reporters involved may not know the truth of the matter.
To help solve corporate tax evasion, Minister of Finance Chang Sheng-ford (張盛和) on Thursday called for the passage of a revision to the existing Income Tax Act (所得稅法), a draft of which the ministry unveiled last year.
Under the revision, the Ministry of Finance could levy a tax on domestic company’s income from a controlled foreign corporation, as well as profits made by a company with its place of effective management being Taiwan.
The revised draft is still waiting to be passed by the legislature after it completed its first reading during the last legislative session.
The ministry said it is going too far to say these companies have dodged NT$30 billion in income tax a year over the past decade as reported by CommonWealth Magazine on Thursday.
Meanwhile, Chang said the ministry would investigate if the companies are complying with the Tax Collection Act (稅捐稽徵法).