The Cabinet yesterday passed a draft amendment stipulating that investments in certain countries or industries without prior application would be punishable by a fine of up to NT$10 million (US$306,110).
As Article 10-1 of the Statute for Industrial Innovation (產業創新發展條例) is to expire by the end of this year, the draft amendments to the statute were approved by the Cabinet yesterday in line with the goal of a “twin transition” to artificial intelligence (AI) and low carbon emissions, the government said.
In addition to provisions about smart machines, 5G mobile networks and cybersecurity, specific definitions of “AI” and “decarbonization” were established to inform domestic companies about what investments would be allowable, thereby facilitating outbound investments while protecting key technologies.
Photo courtesy of the Executive Yuan
According to the bill, the maximum reimbursable investment expenditure would be raised to NT$1.8 billion from NT$1 billion to support investments in equipment for AI and decarbonization, with the applicable period extended to the end of 2029.
To encourage venture capital limited partnerships to invest in start-ups, the threshold to be reimbursed would be lowered to NT$150 million from NT$300 million, although the investments would have to reach a certain amount or percentage within three years, the bill says.
Angel investors investing in start-ups would also enjoy a preferential threshold of NT$500,000, down from NT$1 million, and would receive funding from the government if the start-up was founded less than five years earlier, it says.
To help start-ups obtain capital, angel investors investing in key industries would enjoy a maximum income tax deduction of NT$5 million, up from NT$3 million, it says.
However, investments over a certain amount, in certain countries or regions, or in certain industries or technologies, would not be permitted without prior application, the bill says.
Such investments without prior application and approval are punishable by a fine of NT$50,000 to NT$1 million. Those who fail to correct, suspend or withdraw these investments after receiving warnings would be punishable by an additional fine of NT$500,000 to NT$10 million, it says.
Asked about “investments reaching a certain amount,” Ministry of Economic Affairs Industrial Development Administration Deputy Director-General Tsou Yu-hsin (鄒宇新) said that another bill would be formulated to increase the investment limit to NT$3 billion from NT$1.5 billion.
The term “key industries and technologies” would cover 22 technologies and five industries — national defense, aerospace, agriculture, semiconductors and cybersecurity — which are based on the National Science and Technology Council’s national core technology list, he said.
The bill, once passed in the legislature, is expected to attract up to NT$160 billion of investment across almost all industries. It would benefit more than 1,500 companies by making their investments in smart machines, 5G mobile networks, cybersecurity, AI and low carbon equipment all tax-deductible, Tsou added.
Asked why the thresholds for investment amounts were lowered, Investment Review Department Deputy Director Lu Tseng-hui (呂貞慧) said investment amount thresholds go along with the maximum outbound investment amount decided by the central bank, which rose to NT$3 billion from NT$1.5 billion last month, to the benefit of investors’ capital planning and allocation.
Asked whether “certain countries” include China, she said that would be specified in the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例) and would not be included in the statute.
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