Lexgroup Newsletter (Issue No. 313)

Date: Feb 2019

Securities

1. Amendment to Taipei Exchange Operational Directions for Green Bonds

On 19 January 2019, the Taipei Exchange announced the implementation of the amended "Taipei Exchange Operational Directions for Green Bonds" and related documents.  The amendment is summarized below:

(1) The financial assets securitized beneficiary securities (FASBS) and asset-backed securities (ABS) are securities qualified application with the Taipei Exchange for being the qualified green bonds.

(2) The asset pool for FASBS and ABS shall originate from the green investment plan, and shall be determined in accordance with the Financial Asset Securitization Act.

(3) The issuer for FASBS and ABS is not subject to the requirement for issuing the self-assessment opinion.

Reported by: Stacy Lo / Jack Tai

Company Act

2. Exercise by directions of voting power by written consent

On 19 January 2019, the Ministry of Economic Affairs (MOEA) issued a ruling that in relation to directors agreeing to exercise voting power by written consent under Article 205 of the Company Act, the said agreement can be expressed either by oral or in writing and such means does not need to be set forth in its Articles of Incorporation. If only certain directors agree to exercise their voting power in writing and some others do not, a physical board meeting will need be held.

Reported by: Mike Lu / Cindy Chien

3. The method for electing chairman when a majority directors convene board meeting by themselves

On 19 January 2019, the MOEA issued a ruling that the chairman of a board meeting called by a majority of directors themselves under Article 203-1 of the Company Act can be elected by a majority of directors.

Reported by: Mike Lu / Ester Liu

4. MOEA ruling on Article 182-1 of Company Act

On 21 January 2019, the MOEA issued a ruling that the duties and power of a shareholders' meeting of a company limited by shares owned by a sole shareholder shall be exercised by the board of directors.  As such, such a company does not need to establish meeting rules for shareholders meeting.

Reported by: Mike Lu / Will Chen

Taxation

5. 2019 Highest Borrowing Interest Rate and Ordinary Standard of Employee Salary for Profit-Seeking Enterprise

The Ministry of Finance (MOF) issued a ruling of the "Highest Borrowing Interest Rate and Ordinary Standard of Employee Salary for Profit-Seeking Enterprise for fiscal year of 2019" on 19 January 2019:  We summarize the key points below:

(1) The highest interest rate for borrowing by profit-seeking enterprises:

(a) The interest rate for borrowing from a financial institution will be recognized based on the rate in the loan agreement.

(b) The interest rate for borrowing from a non-financial institution shall not exceed 1.3% per month, and the excessive interest shall not be recognized.

(2) The ordinary standard of employee salary for profit-seeking enterprises:

(a) The salary (including special payment for festivals) of employees for corporations or cooperatives shall be recognized according to the actual remuneration.

(b) The salary (including special payment for festivals) of the owners, executive partners and employees of a proprietorship or partnership shall be recognized according to the actual remuneration.

Reported by: Stacy Lo / Hsiyen Hsu

6. Suspension of securities transaction tax of foreign currency denominated foreign government bonds

On 24 January 2019, the MOF issued a ruling that the securities transaction tax for trading of foreign currency denominated foreign government bonds approved by the competent authority to publicly offered and issued in the Republic of China shall be suspended from 3 April 2018 to 31 December 2026. 

Reported by: Stacy Lo / Deborah Lee

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