FAQ Layout table
| Q: | What is the difference between “residents of the Republic of China” and “non-residents of the Republic of China” regarding the Income Tax Act of the ROC ? |
| A: | The following two categori……
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FAQ Layout table
| Q: | Penalties |
| A: | (1) Late filing: Taxpayers sh……
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Taiwan Financial Service Conference Investor Presentation - Dr. Chuan Lin, Minister of Finance - March 2005
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Remarks at the Closing Ceremony of the 2004 International Seminar on Transfer Pricing and Tax Treaties - Dr. Chuan Lin, Minister of Finance
Honorable Guests, Seminar Participants, Ladies and Gentlemen,
It is an honor and a great pleasure to be here today to host the closing Ceremony of the 2004 International Seminar on Transfer Pricing and Tax Treaties for SGATAR members and developing economies. First, I would like to congratulate all the participants on their successful completion of this training program.
Seminars and Training programs on transfer pricing and tax treaties are often held at international training institutes, including those of the Organization for Economic Cooperation and Development. Tax officers from Chinese Taipei are invited from time to time to attend these training events. This time, by taking the initiative in holding this training program, Chinese Taipei hopes to send a signal to the world that we are willing to make our own contributions to the international community. Moreover, this training program has aimed at informing SGATAR members and developing economies of the latest development in two key issues, as well as giving participants the opportunity to share their own knowledge and experience through presentation and discussion.
No economic entity wants its tax base to suffer due to transfer pricing. Arm's length requirements have emerged to ensure that a transfer price should be the same as if the two companies involved were indeed two independents, not part of the same corporate structure. Keeping transfer pricing at arm's length may prevent multinational groups from shifting profits into low tax jurisdictions via intra-group transactions. It also helps tax administrations retain the authority to receive a fair share of the tax base of multinational enterprises.
In view of the importance of the subject matter, this seminar was developed to complement many similar international training programs. In Taiwan, arm's length principles have presently been incorporated in our Income Tax Law. Furthermore, our Rules for Auditing Profit-seeking Enterprise Income Tax have been amended to include related articles governing the adjustment of tax revenues and irregular transfer pricing by affiliated companies.
Numerous tax treaties, many have been signed to boost trade and investment among different economies, and to prevent double taxation for companies and individuals engaged in trade between different jurisdictions. This also serves to curb tax evasion through the exchange of information between jurisdictions.
Seventeen Double Taxation Agreements have been signed thus far by Chinese Taipei. In holding this seminar, we hope to share these experiences with other economies as you face similar challenges.
The Ministry of Finance has constantly supported and endorsed this type of international training program. With the help of industry experts and specialized professionals, international training programs can cultivate competent tax officers. The face-to-face interaction between participants encourages international cooperation. Most significantly, such training programs are a concrete contribution to international society.Therefore, this Training Institute will be encouraged to continue to develop international programs. I urge all of you to keep in touch with each other and with the Training Institute, to keep us abreast of your future endeavors. We hope you will have the chance to visit Taipei again very soon. My best wishes to everyone.
Thank you very much.
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Financial Reform in Taiwan: Chanllenges and Results-Address at the APEC Business Advisory Council - Dr. Chuan Lin, Minister of Finance-May 13, 2004
Ladies and Gentlemen:
It is my pleasure to be here today. I would like to thank you all for taking the time to participate in this meeting, especially in light of your busy work schedules.
Leaders around the world recognize the invaluable contribution of ABAC as an advisory forum for the APEC Economic Leaders Meeting. The ABAC team provides an important bridge between APEC, the public sector and the business community.
I am very pleased with that this meeting is taking place in Taipei. As you have probably gathered from the news, this is the place to be if you long to feel the pounding pulse of “democracy in action.” I hope you will have a chance to take a ride on our award-winning rapid transit system. Perhaps you can also make a personal contribution to our economy by doing some shopping while you are stay here!
Now, I would like to give a brief overview of our country’s economic profile. I will do this in the context of two main topics: current financial challenges and results of financial reforms.
Taiwan’s economy began to take off in the 1960s, with international trade fueling labor-intensive OEM industries. As the result, our GDP skyrocketed. However, by the 1980s, rapid growth and market liberalization gave rise to increased labor costs, bringing on a whole new set of challenges for the labor-oriented manufacturing sector. In order to stay competitive, it was critical for industrial policies to focus on upgrading traditional industries and developing high-tech, value-added industries. Even so, new industrial bases were not sufficient to completely offset the unemployed workforce left over from former labor industries. Consequently, development of service industries—particularly, banking, securities and insurance industries—became an essential element in policymaking.
I. Current Financial Challenges
I will first talk about some of the financial challenges Taiwan is facing today. For the past twenty years, one of the greatest problems facing the Ministry of Finance was how to make Taiwan’s financial sector more competitive. Government efforts focused on implementing policies conducive to deregulation and globalization. Measures included allowing the establishment of privately-owned financial institutions, privatization of state-owned financial institutions, and designing incentives that would encourage foreign financial institutions to set up branches and subsidiaries here.
Our commitment to this open-door policy and our determination to push forth real reforms has evolved into a market mechanism that fosters efficiency and quality. Financial products are also being further diversified. The course of reform has been laden with challenges. We have had to deal with uncertain factors—both domestic and international—which have taught us that, in addition to being good strategists, we must also be adept troubleshooters. Let me take a moment to elaborate on three major challenges that we have confronted in the process of striving for reform.
The first challenge we had to overcome was cut-throat competition resulting from too many financial institutions with overlapping target markets. Of course, initially, market competition served as a catalyst for improving quality and service. But the rapid emergence of so many similar institutions back-fired, and price wars broke out. Consequently, aside from direct impact on profitability, the financial sector as a whole has suffered from the detrimental side-effects of over-saturation.
The second challenge was economic recession and its impact on the asset quality of our financial institutions. During the late 1980’s, Taiwan’s cumulative trade surplus and an influx of hot-money drove up the stock index and sent real estate prices soaring. In the early 90’s, asset inflation began to backlash. The stock index fell from 12,000 points to only around 2,500 points.
Impending over-liquidity prompted many lending institutions to hastily loosen their credit standards. Easy borrowing led to excessive fiscal leveraging as businesses increased their credit lines and began expanding into unconventional industries, which ultimately resulted in fiscal crisis. The added weight of a global economic downturn made things even worse for domestic enterprises and left asset quality deteriorating. By 2002, the average NPL ratio of domestic banks had surpassed eight percent, up from less than four percent in 1996.
Fortunately, a write-off effort by banks, supported by the Finance Ministry, brought the NPL ratio steadily back down, to less than 4½ percent at the end of 2003, which signaled a vast improvement in asset quality.
The third challenge became manifest with the emergence of conglomerates in Taiwan’s financial services sector. The task of financial examination is currently shared between the Finance Ministry, the Central Bank and the Central Deposit Insurance Corporation. But we have found that our segregated system impedes the efficiency of financial monitoring and can not meet the needs of today’s multi-faceted financial services industry. Therefore, one of our primary objectives is to consolidate supervisory authority under an independent mechanism.
In 2001, the Financial Holding Company Act was adopted. Since then, the M&A’s of Taiwan’s financial institutions have grown substantially. We are now in the process of setting up an independent framework that incorporates mechanisms for monitoring, management and financial examinations. The goal, of course, is a system by which we can effectively regulate financial conglomerates that are doing business in Taiwan—this would include banking, securities and insurance industries. In the long run, everyone will benefit.
II. Results of Financial Reform in Chinese Taipei
To address the three challenges I have just discussed, our government has been aggressively pursuing a comprehensive program of financial reform. Thus far, the measures we have undertaken show that we are making substantive progress in the way of economic development. I would like to give a brief summary of our financial reform program:
1. Structuring a Comprehensive Legal Framework
Firstly, concrete steps have been taken to strengthen Taiwan’s financial infrastructure and to consolidate monitoring and management mechanisms. The Financial Supervisory Commission (or, FSC) has been established as an independent surveillance agency. The FSC is expected to be in full operation by this July. New legislation has also been enacted, and existing laws amended, in order to ensure a more “liberalized and stabilized” local business environment.
2. The “Financial Reform Task Force” (Executive Yuan)
The Executive Yuan set up a Financial Reform Task Force in 2002. The Task Force is comprised of five working committees: banking, insurance, capital markets, community financial institutions and financial crimes. In just one year, the Task Force proposed 23 financial reform initiatives. These initiatives included 63 formal recommendations, 35 of which were short-term measures that were carried out immediately. The remaining 28 are being implemented and will be in place by the end of 2006. We are confident that the completion of our reform program will significantly enhance competitiveness .
3. Improving Asset Quality
From 1999 through the end of 2003, domestic banks recorded over NT$1.2 trillion in NPLs (that’s roughly US$38 billion). During the 18-month period between April 2002 and the end of 2003, Taiwan’s average NPL ratio was cut by nearly half, from just over 8 percent to just over 4 percent. As further incentive, the Finance Ministry began offering automatic approval on new business loans to banks with low NPL ratios. This has encouraged financial institutions to expeditiously write off their NPL’s. The result has been a significant improvement in asset quality.
4. Consolidation of Financial Institutions
The Merger Law of Financial Institutions was passed in December 2000, followed by the Financial Holding Company Act about a year later. Since that time, 14 financial holding companies have been added, integrating a total of 68 related enterprises by the end of last year. We saw fifty-one mergers and acquisitions take place among banking institutions. This indicates to us that our financial markets are indeed becoming more competitive and moving in a positive direction.
5. Revoking the QFII system
Last fall, regulations governing foreign investment were revised, in large part lifting restrictions formerly placed on foreign investors investing in our securities market. The longstanding Qualified Foreign Institutional Investor (or QFII) system) was abolished, reducing application approvals to a one-step process, and simplifying other related procedures. Deregulation was aimed at lowering the operational costs for foreign investment. By the end of 2003, net inflow of foreign investment reached US$66.4 billion, reflecting a substantial increase of nearly 23½ billion US dollars over the year before. The shareholdings of foreign investment have represented around 15% of the total market capitalization of our stock market. This figure is a sign of growing confidence by foreign investors and validates our progress.
6. Reforming Capital Markets
In addition to the abolishment of the QFII system, our Ministry adopted a rating system of information disclosure, setting up an options trading system in our OTC securities market. A Securities and Futures Investors Protection Center has been established and a protection fund initiated. We have set up a trading system for the issuance and lending of government bonds. Plans are underway for a split-bond trading system. Furthermore, regular issuances of government bonds and the establishment of an authorized government bond-trading mechanism and an incentive-oriented fee structure for investment trust companies and financial advisors all aim to attract foreign institutional investors. These measures are expected to boost market capitalization.
7. Financial Assets Securitization
New legislation pertaining to Financial Asset Securitization and the Real Estate Securitization are expected to increase liquidity of financial assets and real estate. By the end of last year, six issuances of such securities had been approved, including our first overseas issuance, totaling NT$37.6 billion or about US$1.1billion.
8. Risk-Based Capital (RBC)
The Risk-Based Capital system (or RBC system) for insurance companies was implemented last summer. In addition to protecting policyholders, the RBC will provide an invaluable risk management resource for our insurance industry.
9. Combating Financial Crimes
Last January the Legislative Yuan amended numerous banking and finance laws in order to allow harsher punishment, including felony charges, for financial crimes. To further curb potential financial crimes, a new stipulation has been added that requires the perpetrator to pay back illegally obtained benefits. The purpose of instating these measures is to enhance market discipline, promote corporate and civic responsibility, and, engender social order for the long term.
III.Conclusion
As participants in the world economy, we all have to face up to the challenges of globalization. Multinational corporations that seek the bounty of globalization must first understand the unique problems and challenges that globalization brings to governments, regional economies and financial markets. National governments must continually explore avenues to help assimilate new frontiers into traditional cultures. It is impossible to unlink the international business community, regional economies and domestic markets. What happens in one country will inevitably reverberate across geo-political borders. This is why APEC stresses the “positive contagious effect” and advocates for a positive inter-reliance among regional economies, with economic and technical cooperation acting as bridges that connect us.
Taiwan intends to stay focused on enhancing domestic markets, recognizing that the financial sector is an impetus for sustaining economic development. The results of our commitment to liberalization and foreign investment will be low-cost funding and highly efficient financial management for our industries and, as a consequence, stability and prosperity for APEC economies as a whole.
I look forward to working with all of you as we pursue the common goal of economic prosperity. Thank you very much.
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Local Tax Work Calendar January 1 ~ December 31, 2004
Local Tax Work Calendar January 1 ~ December 31, 2004
From |
To |
Work Outline |
Jan 1 |
Jan 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Jan 1 |
Jan 15 |
Filing and payment of stamp tax approved to be paid by filing a collective return |
Feb 1 |
Feb 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Mar 1 |
Mar 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Mar 1 |
Mar 15 |
Filing and payment of stamp tax approved to be paid by filing a collective return |
Apr 1 |
Apr 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Apr 1 |
Apr 30 |
Start of the collection and payment of vehicle license tax |
May 1 |
May 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
May 1 |
May 15 |
Filing and payment of stamp tax approved to be paid by filing a collective return |
May 1 |
May 31 |
Start of the collection of payment of house tax |
Jun 1 |
Jun 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Jul 1 |
Jul 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Jul 1 |
Jul 15 |
Filing and payment of stamp tax approved to be paid by filing a collective return |
Aug 1 |
Aug 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Sep 1 |
Sep 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Sep 1 |
Sep 15 |
Filing and payment of stamp tax approved to be paid by filing a collective return |
End Sep 22 |
Closing date of application for deduction or exemption of land value tax, tax rate for self-use residential land |
Oct 1 |
Oct 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Oct 1 |
Oct 31 |
Start of the collection and payment of commercial vehicle license tax |
Nov 1 |
Nov 30 |
Start of the collection and payment of land value tax |
Nov 1 |
Nov 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
Nov 1 |
Nov 15 |
Filing and payment of stamp tax approved to be paid by filing a collective return |
Dec 1 |
Dec 10 |
1. Collecting agents of amusement tax file return and pay amusement tax collected in the previous month |
2. Assessment of the payment of amusement tax of the previous month by collecting agents |
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National Tax Work Calendar January 1 ~ December 31, 2004
National Tax Work Calendar January 1 ~ December 31, 2004
Date |
Work Outline |
From |
To |
Jan 1 |
Jan 5 |
Small business entities file input documentary evidence |
Jan 1 |
Jan 15 |
Business entities file sales amounts and tax amounts |
Jan 1 |
Jan 31 |
Filing of withholding certificates and withholding exemption certificates for various incomes, investment income certificates, certificates of income from transfer of tax-deferred stocks, purchase information of members of multi-level marketing. |
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Jan 1 |
Feb 10 |
Withholding agents send withholding certificates and withholding exemption certificates for various incomes, investment income certificates to taxpayers |
Feb 1 |
Feb 10 |
Small business entities pay business tax of the fourth quarter (October through December of last year) |
Feb 1 |
Feb 15 |
Zero-tax-rate manufacturers file sales amounts and tax amounts (filing by month) |
Mar 1 |
Mar 15 |
Business entities file sales amounts and tax amounts |
Apr 1 |
Apr 5 |
Small business entities file input documentary evidence |
Apr 1 |
Apr 15 |
Zero-tax-rate manufacturers file sales amounts and tax amounts (filing by month) |
May 1 |
May 10 |
Small business entities pay business tax of the first quarter (January through March) |
May 1 |
May 15 |
Business entities file sales amounts and tax amounts |
May 1 |
May 31 |
Filing of annual income tax returns, statement of changes in the imputation credit accounts and undistributed earnings. |
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Jun 1 |
Jun 15 |
Zero-tax-rate manufacturers file sales amounts and tax amounts (filing by month) |
Jun 1 |
Jun 30 |
Profit-seeking enterprises adopting the calendar year system apply to use the Blue Return System. (Except the newly established profit-seeking enterprises) |
Jul 1 |
Jul 5 |
Small business entities file input documentary evidence |
Jul 1 |
Jul 15 |
Business entities file sales amounts and tax amounts |
Aug 1 |
Aug 10 |
Small business entities pay business tax of the second quarter (April through June) |
Aug 1 |
Aug 15 |
Zero-tax-rate manufacturers file sales amounts and tax amounts (filing by month) |
Sep 1 |
Sep 30 |
Provisional income tax returns of profit-seeking enterprises (For calendar year system) |
Sep 1 |
Sep 15 |
Business entities file sales amounts and tax amounts |
Sep 1 |
Sep 30 |
1. Application of using or changing the inventory valuation method. |
2. Application of using or changing the retail inventory method. |
3. Application of using or changing the depreciation method for the fixed assets. |
4. Application of using or changing valuation method for short-term investment. |
Oct 1 |
Oct 5 |
Small business entities file input documentary evidence |
Oct 1 |
Oct 15 |
Zero-tax-rate manufacturers file sales amounts and tax amounts (filing by month) |
Nov 1 |
Nov 10 |
Small business entities pay business tax of the third quarter (July through September) |
Nov 1 |
Nov 15 |
Business entities file sales amounts and tax amounts |
Dec 1 |
Dec 15 |
Zero-tax-rate manufacturers file sales amounts and tax amounts (filing by month) |
Jan 1 |
Dec 31 |
Print checking of account books for practitioners of profession. |
Jan 1 |
Dec 31 |
Report on announcement of or amendment to Employee Retirement Plans. |
Three months before the beginning of the fiscal year |
Non-corporate profit-seeking organizations apply to change the accounting basis. |
Within the six month from the beginning of the fiscal year |
Profit-seeking enterprises apply to use the Blue Return System (Except the newly established profit-seeking enterprises). |
Within the last month before the closing of the fiscal year |
Newly established profit-seeking enterprises apply to use the Blue Return System. |
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Uniform-Invoice Prize Winning Numbers for Months 3-4,Year 2009
(098/05/25)
