NTA to beef up examination of patent transfer for tax evasion

According to the National Tax Administration of Taipei City yesterday (21^st), some local high-tech companies intentionally transferred the patent rights derived from their own R&D to their overseas subsidiaries, and have parent companies in Taiwan pay royalties to their subsidiaries because royalties paid by a profit-seeking enterprise to a foreign enterprise are tax-exempt.  In light of such situation, the NTA is determined to abide by the "substance over form" rule and deny such application for tax exemption.  It will also put more emphases on examination of such cases recently.

 Source: Liberty Times 02/22/2002

 Translated by Jem Chung