Wed, Mar 20, 2019 - Page 3 News List

EU removes Taiwan from uncooperative tax jurisdictions list

By Shelley Shan  /  Staff reporter

Taiwan has been removed from the EU’s observation list of noncooperative jurisdictions for tax purposes thanks to amendments to two laws, the Ministry of Transportation and Communications said yesterday.

The amendments were made to Article 29 of the Act for the Establishment and Management of Free Trade Zones (自由貿易港區設置管理條例) and Article 35 of the International Airport Park Development Act (國際機場園區發展條例), which now stipulate that profit-seeking enterprises engaged only in preliminary or auxiliary business activities or their delegates that purchase, import, store or deliver products in free-trade zones and are reviewed and approved by the managing authority of the zones would be exempted from profit-seeking enterprise income tax on the revenue from sales of the products, the Department of Navigation and Aviation said.

The amendments were promulgated by President Tsai Ing-wen (蔡英文) on Jan. 16.

The EU’s Economic and Financial Affairs Council in 2017 informed 64 nations, including Taiwan, that they needed to adjust their systems.

The EU thinks that the nation’s free-trade zones and international airport park treat domestic and foreign companies differently when it comes to income tax benefits, the department said.

The Executive Yuan in 2016 promised the EU that it would revise income tax benefits offered to businesses in free-trade zones and at the international airport park, assigning transportation ministry and Ministry of Finance officials to engage in bilateral negotiations with Brussels.

After proposed amendments to both acts were accepted by the EU, the Legislative Yuan approved them on Dec. 28 last year.

On Tuesday last week, the EU removed Taiwan, South Korea, Hong Kong and Malaysia, as well as 21 other nations, from its “gray list” of noncooperative jurisdictions for tax purposes, which consists of nations in which tax reform discussions are ongoing.

Countries deemed noncooperative tax jurisdictions are placed on the “black list,” which includes the United Arab Emirates, Nicaragua and 13 other nations, the department said.

The amendments would help increase tax revenue, it said, adding that by making the income tax scheme clearer and more reasonable to foreign investors, it would also lower their tax burden and operational risks.

The Ministry of Finance is streamlining the formulas used to calculate the profit contribution from foreign investors and drafting amendments to subsidiary laws, which would facilitate the development of free-trade zones into international logistics centers, the department said.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top