Statute for Industrial Innovation
1. Amendments to the Statute for Industrial Innovation
The President announced the amendments to the Statute for Industrial Innovation on November 22, 2017. For more details on the amendments, please refer to Item 6 of Issue No. 284 of the Lexgroup Newsletter.
Reported by: Mike Lu / Angela Lin
2. Flow Charts for Organization and Convention Of Labor-Management Conference
The Ministry of Labor has released flow charts for organization and conventions of the labor-management conference on November 30, 2017, which were made according to the Guidelines for Implement of Labor-Management Conference. The charts illustrate the following: labor representatives shall be elected; the qualifications labor representatives must meet; the roster of the representatives of the labor-management conference shall be reported to the competent authority for recordation. Additionally, the procedures for the notification of convention, the threshold for attendance representatives, the resolution methods and threshold, and the issuance of meeting minutes for the reference of the employers and employees are decided.
Reported by: David Tsai / Naiju Kuan
3. President Promulgated the Act of Recruitment and Employment of Foreign Professional Talents
On November 22, 2017, the President announced the Act of Recruitment and Employment of Foreign Professional Talents. Please refer to Item 2 of Issue No. 284 of the Lexgroup Newsletter for details.
Reported by: David Tsai / Zachary Peng
4. Announcement of Qualifications for "Foreign Specified Professional Talents" and Draft "Regulations Governing Approval for Foreign Specified Professional Talents' Applications for Employment Gold Cards"
On November 24 and 28, 2017, the Financial Supervisory Commission ("FSC") and the Ministry of Science and Technology respectively announced the qualifications for foreign specified professional talents equipped with expertise in finance and in science and technology fields, pursuant to Item 2, Article 4 of the Act of Recruitment and Employment of Foreign Professional Talents.
Article 8 of the Act of Recruitment and Employment of Foreign Professional Talents provides that, where a foreign specified professional talent intends to engage in professional work in Taiwan, he/she may apply for an employment gold card, which is a 4-in-1 license of work permit, residence visa, alien residence certificate and re-entry permit. The Ministry of Interior therefore announced the draft "Regulations Governing Approval for Foreign Specified Professional Talents' Applications for Employment Gold Cards" on November 30, 2017, which set forth conditions and other relevant matters regarding application for, review of and reapplication for employment gold cards.
Reported by: David Tsai / Zachary Peng
5. Draft Regulations on Income Tax Reduction for Foreign Professionals
According to the authorization under Paragraph 3, Article 9 of the "Act for the Recruitment and Employment of Foreign Professionals", the Ministry of Finance announced the draft "Regulations on Income Tax Reduction for Foreign Professionals" on November 20, 2017, which we summarize below:
(1) Foreign professionals: A "foreign professional" means a foreign professional who possesses special expertise needed by the Republic of China (ROC) in science and technology, economics, education, culture, arts, sports and other fields, as announced by the relevant central competent authority;
(2) Requirements: The foreign professional engages in professional work and meets certain conditions, does not have household registration within ROC in the past 5 years and has for the first time been approved to reside in the ROC for the purpose of work; and
(3) Tax benefit: Within 3 years starting from the tax year in which the foreign professional for the first time has resided in the ROC for 183 days and has salary income of more than NT$3 million, one-half (1/2) of the part of the foreign professional’s salary income exceeding NT$3 million in each such year shall be exempted from calculation of the total income for individual income tax in such year, and Subparagraph 1, Paragraph 1, Article 12 of the Income Basic Tax Act shall not apply.
Reported by: Stacy Lo/ Peter Huang
6. Regulations Governing the Implementation of the Common Standard on Reporting and Due Diligence for Financial Institutions
The Ministry of Finance announced the Regulations Governing the Implementation of the Common Standard on Reporting and Due Diligence for Financial Institutions ("CRS") on November 16, 2017, which we summarize below:
(1) Reporting period and relevant information: Financial institutions shall report the relevant information of the reporting accounts each year before June 30, including names, addresses, tax jurisdictions, taxpayer identification numbers, dates and places of birth (natural persons only), account numbers, account balances or values, and account income (e.g., interests, dividends, gain on disposal or redemption of financial assets) ;
(2) Financial institutions: The aforementioned financial institutions refer to onshore financial institutions, including depository institutions, custodial institutions, investment entities, specified insurance companies and Taiwan branches of foreign financial institutions;
(3) Reporting accounts: The aforementioned reporting accounts refer to the accounts held or jointly held by the residents of the reportable jurisdictions or the passive non-financial entities controlled by the residents of the reportable jurisdictions, which after due diligence procedures are recognized as reporting accounts;
(4) Financial accounts: The accounts managed by financial institutions, including deposit accounts, custody accounts, equity and debt interest in certain investment entities, insurance contracts with cash value and annuity contracts, among others;
(5) Due diligence procedures (''DDR''): The reporting financial institutions shall conduct DDR on the relevant accounts to recognize foreign accounts and reporting accounts; and
(6) After implementation of the CRS, the financial institutions shall complete the DDR on existing individual high value accounts (i.e., the balance as of December 31, 2018 exceeding USD1 million) before December 31, 2019; and complete the DDR on existing individual low value accounts (the balance as of December 31, 2018 not exceeding USD1 million) before December 31, 2020.
Reported by: Stacy Lo/ Peter Huang
7. Simplification of Reporting Requirements for Audit Matters of Securities Investment Trust Enterprises and Securities Investment Consulting Enterprises Engaging in Discretionary Investment Mandate Business
On November 23, 2017, the Securities Investment Trust and Consulting Association of the R.O.C. announced a ruling to adjust the reporting requirement for audit matters of securities investment trust enterprises and securities investment consulting enterprises engaging in discretionary investment mandate business, pursuant to which, the report deadline in connection with the implementation of audit plan and improvement status of abnormal events for the period of last year will be extended to five months after the end of each year.
Reported by: Jeffrey Liu/ Evelyn Shih
8. Rules Regarding Banks Concurrently Engaging in Foreign Bond Trading Business
The FSC announced the latest rules regarding banks concurrently engaging in foreign bond trading business on November 20, 2017, which provide that such business personnel may concurrently engage in the business of the same nature with foreign derivatives products information and advisory service, foreign exchange and derivatives products marketing, and back office functions, such as clearance, settlement and reporting.
Reported by: Stacy Lo/ Jack Tai
9. Regulations Governing Securities Business Engaged in by Offshore Banking Units
On November 27, 2017, the Financial Supervisory Commission ("FSC") announced the "Regulations Governing Securities Business Engaged by Offshore Banking Units ("OBU")" (the "Regulations"), which took effect on the same day. The Regulations are hereby summarized:
(1) Except for investment in foreign currency securities for the purpose of utilization of funds, the OBU shall follow the provisions under the Securities and Exchange Act to engage in businesses specified in Subparagraphs 4, 6, and 7, Paragraph 1, Article 4 of the Offshore Banking Act;
(2) Where the trading involves offshore structured products, the counterparty shall be limited to professional institutional investors, high net worth corporate investors, and professional corporate investors or funds with the total assets, as specified in financial statements, exceeding NT$100 million;
(3) The securities shall not be denominated in NTD, and the underlying products or portfolio shall not involve in the exchange rate of NTD, interest rate indexing of NTD, or any product denominated in NTD;
(4) The securities business engaged in by an OBU shall be recognized in the OBU's bookkeeping and be disclosed as a footnote to the financial statement of an independent securities department of the headquarter bank (or the branch established by the foreign bank when applying for recognition) ;
(5) OBUs may not distribute offshore structured products to onshore investors in any business model other than securities proprietary trading; and
(6) OBUs which have engaged in securities business before announcement of the Regulations but have not obtained approval according to the Securities and Exchange Act shall apply for such approval within 6 months after announcement of these Regulations. For the existing and ongoing trading with a client not qualified under the Regulations, such trading may continue under the original conditions until its expiration.
Reported by: Stacy Lo/ Nereid Lin
10. FSC Reiterating that Banks Shall Not Solicit Their Clients to Invest In Financial Products by Leverage
On November 23, 2017, the FSC announced and reiterated that any bank which solicits its clients to invest in financial products by leverage may violate Subparagraph 4, Paragraph 1, Article 20 of the "Regulations Governing Scope of Business, Restrictions on Transfer of Beneficiary Rights, Risk Disclosure, Marketing, and Conclusion of Contract by Trust Enterprises."
Reported by: Stacy Lo/ Nereid Lin
11. Ceasing to Apply Online Insurance Pilot Project for Insurance Agency Companies, Insurance Brokerage Companies and the Banks Concurrently Engaging in Insurance Agency and Insurance Brokerage Business.
As the FSC announced the "Guidelines for Operating Online Insurance Business for Insurance Agency Companies and Insurance Brokerage Companies" on November 3, 2017, the FSC announced that "Online Insurance Pilot Project for Insurance Agency Companies, Insurance Brokerage Companies and the Banks Concurrently Engaging in Insurance Agency and Insurance Brokerage Business" would cease to apply on November 13, 2017.
Reported by: Stacy Lo/ Allen Lai
12. Draft Telecommunication Administration Act
On November 20, 2017, the National Communications Commission announced the draft Telecommunication Administration Act. The purpose of having this draft is to respond to the technological development and popularization of Internet applications and, as a result, the subsequent changes in industry structure and market. We summarize the daft below:
(1) The draft adopts an "administration by activity" model, under which the actual business activities are subject to administration;
(2) Market participation is relaxed. A voluntary registration regime, instead of the authorized license regime, will be adopted;
(3) Telecommunication enterprises shall share the loss and necessary management fees incurred from telecommunication universal services;
(4) Telecommunication enterprises shall not without justifiable reasons refuse to other operators' negotiation requests for network interconnection;
(5) Telecommunication enterprises whose radio frequency was assigned by the regulator or whose market share is over 25% shall seek and obtain regulator's prior approval in cases of asset/business transfer, acquisition of shares, merger or investment; and
(6) The authority may treat certain telecommunication enterprises as dominant market players and may impose special regulatory measures on them.
Reported by: Kang-Shen Liu / Nereid Lin
13. Draft Digital Communication Act
On November 16, 2017, the Executive Yuan passed the draft Digital Communication Act, which is subject to the Legislative Yuan's approval and we summarize below:
(1) To deal with digital communication related matters, the government shall establish a mechanism for public consultations and participation;
(2) Users shall have freedom to choose service and equipment for digital communication. Service providers may select technologies or specifications for data transmission, provided that they shall reasonably use internet resources and disclose flow control measures;
(4) Service providers shall be liable for the information they provide for use, but they are not obligated to review or supervise others' information conveyed or stored by them. Additionally, service providers shall not be liable for users' tortious acts under prescribed conditions; and
(5) Where there is any dispute between service providers and users or any third parties, any party to such dispute may seek provisional injunctions from courts.
Reported by: Kang-Shen Liu / Zachary Peng
14. Amendments to the Cable Radio and Television Act
On November 21, 2017, the Legislative Yuan passed the amendments to Articles 33 and 61 of the Cable Radio and Television Act, pursuant to which the system operators shall provide a channel without charges for broadcasting of parliamentary proceedings and shall list said channel as a basic channel. Violation of such provision faces a fine ranging from NT$200,000 (inclusive) to NT$4,000,000 (exclusive) and a correction order.
Reported by: Kang-Shen Liu / Nereid Lin
Consumer Protection Act
15. Amendment of the Information which Must Be Provided to Consumers in Entering a Contract for Distant Sales
On November 28, 2017, the Ministry of Economic Affairs announced "products sold by way of distant sales which are subject to the inspection and inspection mark based on the Commodity Inspection Act must have a commodity inspection mark or information on completion of inspection" based on Paragraph 1.6 of Article 18 of the Consumers Protection Act.
Reported by: Kang-Shen Liu / Allen Lai
16. Act Governing Market Development and Management of Domestic Tenancy
On November 28, 2017, the Legislative Yuan passed the three readings of the Act Governing Market Development and Management of Domestic Tenancy which we summarize below:
(1) A security deposit shall not be more than two month’s rent;
(2) Lessor's consent is required for lessee's sublease;
(3) Lessors, lessees or their heirs may terminate early a lease agreement under certain circumstances;
(4) Nonprofit organizations formed by lessors or lessees based on the government's guidance may coordinate the disputes between lessors and lessees; and
(5) There is no any conciliation fee charged by Committee on Real Estate Dispute Conciliation to conciliate lease-related disputes.
Reported by: Kang-Shen Liu / Edison Tang
Medical Care Corporate
17. Draft Amendments to the Rules Governing the Selection of Directors of Medical Care Corporate
On November 30, 2017, the Ministry of Health and Welfare announced the draft amendment to the Regulations Governing Selection of Directors of Medical Care Corporate. The draft amendment removes Subparagraph 6, Article 7 of the Regulations, which requires that "any person who has mental disease or abnormal body/mind unable to perform his/her duties cannot act as director of medical care corporate." The amendment is to respond to the United Nations' Convention on the Rights of Persons with Disabilities to avoid from discrimination against such a person.
Reported by: Kang-Shen Liu / Chenchi Wang