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Other Tax Incentives

Type Explanation
To encourage companies, limited partnerships, and SMEs to invest in innovative R&D, companies or limited
partnerships, that have not committed any serious violations of environmental protection, labor, or food health and
safety laws over the last three years, may deduct the amount of expenditures for research and development from
their business income tax by either deducting 15% of the amount of expenditures for the current year, or 10% of
the amount of expenditures for 3 years starting from the current year. In either case, the total tax credit may not
R&D exceed 30% of the business income tax payable for the current year.
Taiwanese individuals, companies, and limited partnerships may deduct R&D expenditures in any one year within
the scope of their income from the assignment or authorization of all intellectual property rights derived from their
own R&D from taxable income for the year where that income is up to 200% of R&D expenditures for that year.
Applicants may use either this tax incentive or the previous investment tax credit, but not both.
Biotech or pharmaceutical companies may deduct the equivalent of up to 25% of the amount invested into R&D
from the amount of profit-seeking enterprise income tax due each year within the first five years from the year in
which profit-seeking enterprise income tax is payable, but no more than the equivalent of 50% of the profit-seeking
enterprise's income tax payable in the current year. Exceptions apply to deductions for the last year.
Biotech or pharmaceutical companies that invest in new machinery, equipment or systems used in production or
manufacturing, for which the total expenditure is between NT$10 million and NT$1 billion within the same tax year,
are eligible for either a deduction of 5% for one year, or deduction of 3% over three years. A maximum of 30% of
profit-seeking enterprise income tax in the current year can be deducted beginning in the year that profit-seeking
enterprise's income tax is payable.
Profit-seeking enterprises that invest in the establishment or expansion of a biotech or new pharmaceuticals
company and has been a registered shareholder of the company for more than three years, may deduct up to
20% of the invested amount from their profit-seeking enterprise income tax payable each year within five years
Biotechnology and from the year in which the tax is payable. This deduction is limited to 50% of the profit-seeking enterprise's income
Pharmaceutical tax payable by the company in the current year.
Industry
Individuals that invest NT$1 million or more in a single unlisted or non-OTC listed biotech or pharmaceutical
company, that has been established for a certain period, and have held the shares for at least three years may
deduct up to 50% of the invested amount within two years starting from the year following the three-year holding
period. The maximum deduction per year is capped at NT$5 million.

Senior professionals of biotech or pharmaceutical companies holding newly issued shares, obtained as rewards
or stock option certificates, and technology investors who purchase shares based on technology investment or
hold shares subscribed by the company's stock option certificates (where the subscription price is lower than the
par value) may opt to calculate their taxable income based on the transfer price at the time of actual transfer. In
addition, senior professionals or individual technology investors who hold shares and continue to work or provide
technology application services for two years or longer may opt to be taxed based on the lower of "market price at
the time of acquisition or acquisition price" or the "actual transfer price".

Private-sector companies that participate in major infrastructure projects are eligible for a five-year business
income tax exemption, investment tax credits, and exemption from tariffs on imported construction machinery not
Private Participation manufactured or supplied within the country.
in Major Infrastructure
Projects For private companies participating in major infrastructure projects, appropriate deductions may be granted for
land value tax, house tax, or deed tax due upon acquisition during the construction and operation periods.

Companies and limited partnerships that invest cash in cultural and creative enterprises which are approved by
the Executive Yuan as part of the national strategic key cultural and creative industries may deduct up to 20% of
the investment amount from their business income tax due over five years beginning from the year in which the
National Strategic Key business income tax is payable.
Cultural and Creative Individuals investing cash in domestic high-risk new ventures approved by the Executive Yuan as national
Industries strategic key cultural and creative industries as well as projects co-invested by the National Development Fund of
the Executive Yuan, where the investment amount in the company or enterprise reaches NT$ 500,000 within the
current year and the investment is held for two years, may deduct 50% of the investment amount from their total
individual taxable income for the year following the two-year holding period.

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