Fri, Aug 28, 2026 page3

• Start-ups to receive perks under new amendments

  • By Chen Cheng-yu and Jonathan Chin / Staff reporter, with staff writer
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  The Legislative Yuan yesterday passed amendments to the Industrial Innovation Statute (產業創新發展條例) to provide perks and benefits to start-ups.

  The proposed changes would double the cap on the tax-deferred portion of stock option bonuses to NT$10 million (US$315,378) from NT$5 million per year, raise the maximum age of start-ups from five to eight years, and loosen regulations governing venture capital.

  The value of the tax-deferred portion of stock options would be determined by the share price on the date of their issuance.

  

  Legislative Speaker Han Kuo-yu, right, bangs a gavel at the legislature in Taipei yesterday.

  Photo: George Tsorng, Taipei Times

  Employees who receive stock-based compensation might choose to exclude up to NT$10 million in shares — calculated at the current market value — from their taxable income in the year the shares are acquired or become disposable.

  Once this tax deferral option is selected, it cannot be altered.

  The provision is scheduled to take effect on Jan. 1 next year.

  If an employee holds the shares for at least two years from the date of acquisition and continues to work for the issuing company — or for a parent or subsidiary company with a stake of more than 50 percent — they may choose to be taxed based on the market value of the shares at the time they were acquired or became disposable.

  The exemptions do not apply to an eligible company’s chairperson or supervisor.

  To prevent high initial thresholds from hindering early-stage investment, the amendment significantly lowers the minimum start-up investment ratio required for limited partnership venture capital firms to qualify for pass-through taxation.

  Under current regulations, the required “cumulative amount invested in start-up companies as a percentage of a venture capital firm’s total paid-in capital for the given year” is set at a flat 50 percent during its third, fourth and fifth years of operation.

  The amendment adjusts these figures, lowering the thresholds to 10 percent, 20 percent and 30 percent for the third, fourth and fifth years respectively, and introduces a new 40 percent threshold for the sixth year.

  The eligibility for a company to qualify as a start-up has also been expanded from enterprises less than five years old to those less than eight years old.

  Tax deductions would apply for up to 50 percent of investments valued at least NT$500,000 made by an individual “angel” investor into a high-risk start-up for at least three years.

  The maximum annual deduction is capped at NT$5 million, although this limit is set at NT$3 million if the start-up does not belong to a designated key national strategic industry.

  In addition, the legislature passed another resolution for the Ministry of Economic Affairs and the Ministry of Finance to establish a high-risk start-up database to aid policy and law adjustments.

  The Ministry of Economic Affairs said that the amendments would not only revitalize the investment environment and inject momentum into start-up development, but also strengthen corporate measures for talent retention and recruitment.

  Additional reporting by Liao Chia-ning
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