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Type Explanation

When a Taiwanese individual, company, or limited partnership provides intellectual property rights in exchange for
company shares, regardless of whether the company in which investment is obtained is a listed (OTC) or emerging
stock company, such a party may choose to calculate their income tax on the basis of the transfer price at the actual
time of transfer. Those who hold shares and have provided services related to the application of the intellectual
property rights of the stock issuing company for a total of two years may be taxed on the basis of either the "stock
acquisition price or the actual transfer price", whichever is lower.

Pricing of intellectual When a Taiwanese academic research organization receives company shares as compensation for intellectual
property rights as property rights, which are distributed to domestic inventors, the inventors may choose to calculate their income tax on
shares the basis of the transfer price at the actual time of transfer. Those who hold shares and serve in industrial, academic,
or research institutions in Taiwan and have engaged in research and development for a total of two years may be
taxed on the basis of either the "current stock acquisition price or the stock transfer price", whichever is lower.

SMEs or individuals who contribute their intellectual property in exchanage for shares in companies which are not
listed on the Taiwan Stock Exchange or traded on the OTC emerging market shall be exempt from income tax for
the current year. Instead, income tax shall be calculated on the basis of the transfer price and deferred until the
actual time of transfer.

Venture capital enterprises established as limited partnerships meeting the required criteria shall be exempt from
Venture capitalists
organized as limited profit-seeking enterprise income tax during the applicable period. Income for the current year is distinguished as
operating income either deriving or not deriving from securities trading income. Each partner may calculate their
partnerships are income tax for the year in accordance with his or her predetermined earnings distribution ratio, where operating
considered as
individuals for taxation income deriving from securities trading income shall be exempt from tax in the case of individuals and foreign
profit-seeking enterprise partners.

Individuals who hold investments of up to NT$ 1 million in a high-risk startup that has been in existence for less
Tax Incentives for than two years may deduct up to 50% of the invested amount from their total income, where such deductions shall
Angel Investors
be limited to NT$ 3 million in any one year.

Corporations or limited partnerships investing more than NT$ 1 million and less than NT$ 1 billion in the same tax
Investment tax credits year in 5G mobile communications systems between January 1, 2019 through December 31, 2024, or investing
for smart machinery in information security products or services between January 1, 2022 through December 31, 2024, may claim a
or 5G mobile
communication 5% tax credit. The deduction may be taken in full over one year or a 3% credit may be taken over three years.
Whichever method is selected to reduce business income tax shall not exceed 30% of the income tax payable for
systems
the enterprise in the current year.

Companies in
Key Positions of Companies that are innovating technologies, based in Taiwan, hold key positions in international supply
International Supply chains, and meet certain criteria may deduct 25% of their investments in leading innovative R&D from
their corporate income tax due for the current year as well as 5% of the amount spent on purchasing new
Chains Investing in machinery and equipment for use in their own advanced manufacturing processes. This deduction may not
Leading R&D and
Process Equipment exceed 30% of the profit-seeking enterprise income tax for the current year.

Incentives for Beginning in 2018 declaration of undistributed earnings for profit seeking companies or limited partnerships that
reinvestment of make substantial investments using undistributed earnings may include the investments in their calculation of
retained earnings undistributed earnings for a 5% exemption from profit-seeking business income tax.

Tax concessions Professional workers who meet the criteria for foreign special professionals, who have been residing in Taiwan for
for specific foreign over 183 days as first-time residents with an annual income over NT$ 3 million, will only pay half of the tax on the
professionals portion of their income exceeding NT$ 3 million and are exempt from paying tax for foreign-earned income.

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