Foreign Holders Making Capital Contribution Locally with Patent Right, Trademarks and Know-how Eligible for Tax Exemption.

　The Ministry of Finance reviewed and is proposing to amend the examination guidelines with respect to collection of royalties by foreign corporate holders of patent rights, trademark right, know-how and whole-plant technology.  According to the amendment proposed by the MOF, the eligibility threshold will be substantially lowered where a foreign business may, pursuant to subparagraph 21 of the first paragraph of Article 4 of the Income Tax Act, apply for exemption of tax on the remuneration received in the form of equity shares in consideration of its providing the patent, trademark or know-how it owns.  However, the subject foreign patent or trademark must have a corresponding Taiwanese patent or trademark.  The remuneration received by the foreign holder of the patent, trademark, know-how is called royalty.  The fees received by the foreign holder for providing whole-plant technological services are called service fees.  (2007.7)

/EMA