The Ministry of Economic Affairs (MOEA) may propose further tax breaks to encourage investment in research and development (R&D) and the purchase of advanced equipment to promote industrial innovation in Taiwan, a ministry official said Wednesday.
The official, speaking on condition of anonymity, indicated that the measures would involve amendments of the Statute for Industrial Innovation and could be proposed later this year after the Legislative Yuan’s fall session begins in September.
The statute currently allows companies to deduct up to 15 percent of their R&D expenses in a given year from the amount of taxes they owe, and the ministry is considering raising that 15 percent limit.
Another change being considered could benefit companies that buy equipment related to smart machines, 5G mobile networks or other advanced manufacturing processes.
Under the statute, companies can credit up to 5 percent of their investment in such equipment against payable income taxes for that year, and up to 3 percent of the investment against their taxes in each of the three following years, up to NT$1 billion (US$34 million).
The MOEA is considering raising both the 5 percent and 3 percent ceilings and removing the NT$1 billion limit, the official said.
While many industries would be eligible for the beefed up tax breaks, they are widely perceived as an attempt to support Taiwan’s semiconductor sector amid fierce global competition.
Countries such as Japan, South Korea and United States are all providing strong incentives to facilitate semiconductor development, which is why Taiwan should introduce concrete measures to keep its competitive edge, the official said.
Source: Focus Taiwan News Channel