The Cabinet yesterday approved an amendment to the Act for the Establishment and Management of Free Ports (自由貿易港區設置管理條例) that would grant foreign companies income tax exemption, in a bid to attract multinational logistics enterprises.
Draft article 29 of the amendment states that a foreign enterprise or its branch registered in the country, which — by itself or entrusting a company in the free port — engages in storage or simple reprocessing and makes delivery of the foreign company’s products to customers abroad shall be exempted from business income tax.
If the products are sold to customers domestically, the company will be taxed business income tax when its domestic sales accounts for less than 10 percent of aggregate sales.
The amendment suggested lowering the minimum number of Aboriginal laborers that companies in free ports are required to hire from 5 percent of total staff to 1 percent.
It stipulated that the government would provide various subsidies to businesses whose Aboriginal laborers made up between 1 percent and 3 percent of its work force.
“The revisions will help remove obstacles impeding multinational companies from investing in the country’s free ports,” said Yin Cheng-peng (尹承蓬), the head of the Department of Navigation and Aviation under the Ministry of Transportation and Communication (MOTC).
Also approved at the Cabinet meeting was a draft bill designed to set up a state-owned company to manage the Taoyuan International Airport Zone, a planned free trade zone near the Taiwan Taoyuan International Airport where businesses will enjoy preferential taxes and fewer labor restrictions.
Lee Lung-wen (李龍文), director-general of the MOTC’s Civil Aviation Administration, said that the government would put NT$28 billion (US$829.7 million) into the company that will have a staff of about 462.