The central authorities in charge of relevant enterprises may provide grants, incentives or guidance to promote the following matters:
1. Promotion of industrial innovation or R&D.
2. Provision of guidance relating to industrial technology and industrial upgrading.
3. Encouraging enterprises to establish innovation or R&D centers.
4. Assisting in the establishment of innovation or R&D institutions.
5. Promoting collaboration between industries, academic institutions, and research institutions.
6. Encouraging enterprises to participate in workforce cultivation in schools.
7. Ensuring that there is an adequate supply of industrial human resources.
8. Helping local industries innovate.
9. Encouraging enterprises to use big data and open government data to develop and innovate commercial applications or service models.
10. Other matters relating to the promotion of industrial innovation or R&D.
The regulations governing the recipients of the grants, incentives or guidance as referred to in the preceding Paragraph, the eligibility criteria, the review standards, the application procedures, the approving authority, and other related matters shall be prescribed by the central authorities in charge of relevant enterprises.

To promote state-owned enterprises’ innovation or research and development (R&D), state-owned enterprises are required to have an R&D budget accounting for a certain percentage of its total expenditure. If the R&D budget of a state-owned enterprise falls short of such a percentage for two consecutive years, the central competent authority shall consult the authority in charge of the state-owned enterprise about setting up a review and adjustment mechanism for such state-owned enterprise.
The percentage of the R&D budget in the total expenditure under the preceding paragraph shall be set by the central competent authority, taking into account the characteristics and scales of the state-owned enterprises after consulting the authority in charge of each such state-owned enterprise.
Unless otherwise provided in the treaties or agreements to which the ROC is a party, a state-owned enterprise may apply a limited tendering procedure to a procurement project for cooperation or commissioned study for innovation or R&D with a value reaching the threshold for public announcement, without being subject to the restrictions under Article 19 or Paragraph 1 of Article 22 of the Government Procurement Act.
The ownership or the right to license others regarding the R&D results generated from the cooperation or commissioned study for innovation or R&D projects conducted by state-owned enterprises under the preceding paragraph may be conferred, in whole or in part, on the entities doing such innovation or R&D, without being subject to the restrictions under the National Property Act.
The R&D results that have been conferred on a public school, public institution (organization) or public enterprise in accordance with the preceding Paragraph and their safekeeping, use, profits, utilization and disposal shall not be subject to the restrictions under Articles 11, 13, 14, 20, 25, 28, 29, 33, 35, 36, 56, 57, 58, 60, or 64 of the National Property Act.
The ownership and utilization of the R&D results and the income generated therefrom as referred to in Paragraph 1 and Paragraph 2 of this Article shall follow the principles of fairness and effectiveness, taking into account the proportion and contribution of capital and service, the nature of the R&D results, potential of application, social benefits, national security, and impacts on the market. Regulations for the objectives, prerequisites, durations, scopes, proportions (in whole or in part), registration, administration, allocation of revenue, recusal, and disclosure of relevant information shall be prescribed by the central competent authority in consultation with the authority in charge of each of such state-owned enterprise.
The preceding six paragraphs shall not apply to a state-owned enterprise under either of the following circumstances:
1. The enterprise is not a corporate entity.
2. The enterprise is established to protect depositors’ rights and interests, maintain credit order, and promote the sound development of financial business.

To promote industrial innovation, where a company or limited partnership has not violated any environmental protection, labor safety and health, or food safety and sanitation laws in the past three years, the company or limited partnership may select one of the following incentives for crediting the funds invested by it in research and development against the profit-seeking enterprise income tax payable by it. Once the company or limited partnership selects an incentive, it cannot change its selection, and the creditable amount shall not exceed 30 percent of the profit-seeking enterprise income tax payable by it in the then-current year.
1. Up to fifteen percent of the R&D expenses may be credited against the profit-seeking enterprise income tax payable by it in the then-current year.
2. Up to ten percent of the R&D expenses may be credited against the profit-seeking enterprise income tax payable by it in each of the three years following the then-current year.
The regulations governing the scope of application of the investment credit under the preceding Paragraph, the application deadline, the application procedure, the approval authority, the implementation period, and the tax credit rate shall be prescribed by the central competent authority in consultation with the Ministry of Finance.

For the purpose of optimizing industrial structure to achieve smart upgrade transformation and to encourage application of diversified innovations, where a company or limited partnership has not committed severe violation of any environmental protection, labor, or food safety or sanitation laws in the past three years, and has invested in the hardware, software, technology or technical services in connection with brand-new smart machines or introduction of 5th-generation mobile networks for its own use between January 1, 2019 and December 31, 2024 or in connection with cyber security products or services for its own use between January 1, 2022 and December 31, 2024, with expenditure of more than NT$1 million and under NT$1 billion in the same taxable year, may select one of the following credits against the payable profit-seeking enterprise income tax; once selected, it cannot be changed. Each annual investment creditable amount shall not exceed 30 percent of the payable profit-seeking enterprise income tax in the then-current year:
1. Up to five percent of the expenditure may be credited against the payable profit-seeking enterprise income tax in the then current year.
2. Up to three percent of the expenditure may be credited against the payable profit-seeking Enterprise’s income tax in each of the three years from the then-current year.
Where a company or limited partnership is concurrently applicable in the same year for the investment credit under the preceding paragraph and other types of investment credit, the total amount creditable in the then-current year shall not exceed 50 percent of the payable profit-seeking enterprise income tax of the then-current year, unless other laws govern the then-current year is the final creditable year and there is no limitation on the creditable amount.
The term smart machines under Paragraph 1 refers to smart technology elements that utilize big data, artificial intelligence, Internet of things, robots, lean management, digital management, clicks and mortar, additive manufacturing or sensors, and having smart functions that produce information visualization, fault prediction, accuracy compensation, automatic parameter setting, automatic control, automatic scheduling, application service software, flexible production, or mixed-model production.
The term 5th-generation mobile networks under Paragraph 1 refers to 5G-related technological elements, equipment (including equipment needed for testing) or vertical application systems that utilize MF/HF communications meeting the specifications of 3rd Generation Partnership Project Release 15, large numbers of antenna arrays, network slicing, network virtualization, software-defined networking and edge computing to increase production efficacy or to provide smart servicess.
The term cyber security products or services under Paragraph 1 refers to the hardware, software, technology or technical services used in connection with the safeguard of terminal and mobile devices, maintenance of network security and/or the maintenance of data and cloud security to prevent information and communication system or information from unauthorized access, use, control, disclosure, damage, alteration, destruction or other infringement to assure its confidentiality, integrity and availability.
A company or limited partnership applying for investment credit applicable under Paragraph 1 shall submit an investment scheme capable of generating certain effects to the central authority in charge of relevant enterprises for approval on a case-by-case basis, and may apply only once in each taxable year.
The scope of applicability, investment schemes capable of generating certain effects, application deadline, application procedure, authority granting approval, tax credit rate, calculation of the total creditable amount in the then-current year, and other related matters for investment credit in smart machines, 5th-generation networks or cyber security products or services under the preceding six paragraphs shall be prescribed by the central competent authority in consultation with the Ministry of Finance.

To strengthen the international competitive advantage of industries and reinforce domestic industries’ foothold on the global supply chain, a company that engages in technological innovation in Taiwan, occupies a key position in the international supply chain, and meets the following conditions may enjoy a tax credit of 25% of the amount that it spends on the forward-looking innovative R&D against its profit-seeking enterprise income tax payable in the then-current year, up to 30% of the amount of the profit-seeking enterprise income tax payable in the then-current year:
1.The amount of the company’s R&D expenses and the percentage of such expenses to its net operating revenues for the same taxable year reach certain thresholds.
2.The effective tax rate applicable to the company in the then-current year is not lower than a certain percentage.
3.The company has not committed any severe violation of any environmental protection, labor, or food safety and sanitation laws in the past three years.
Where a company meets the requirements specified in the preceding Paragraph and the amount that it spends on the purchase of new machinery or equipment for its own use in advanced manufacturing processes reaches a certain threshold, the company may enjoy a tax credit of 5% of such amount against its profit-seeking enterprise income tax payable in the then-current year, up to 30% of the amount of the profit-seeking enterprise income tax payable in the then-current year.
Where a company has applied and been approved for the investment credit under Paragraph 1, none of its R&D expenditures in the then-current year can enjoy the income tax credits or reductions provided for the purpose of encouraging the R&D under Article 10 or Paragraph 1, Article 12-1 of this Statute and other laws; where a company has applied and been approved for the investment credit under the preceding Paragraph, none of its expenditures for the purchase of machinery and equipment in the then-current year can enjoy the income tax credits or reductions for investment in machinery or equipment under the preceding Article and other laws.
Where a company has applied and been approved for both the investment credits under Paragraphs 1 and 2 or is concurrently applicable for such investment credits and any other investment credits under this Statute or other laws in the same year, the total amount creditable in the then-current year shall not exceed 50% of its profit-seeking enterprise income tax payable in the then-current year, unless, under other laws, the then-current year is the final creditable year and there is no limitation on the creditable amount.
The effective tax rate referred to in Subparagraph 2, Paragraph 2 shall mean the percentage of the amount of the tax payable by a company in the then-current year as calculated pursuant to Paragraph 1, Article 71 of the Income Tax Act, after deducting the tax reductions for the income tax paid on overseas income in the country of origin under the tax laws of that country, the tax reductions for the income tax already paid in the People’s Republic of China (PRC) or any third area on PRC-sourced income, and the investment credits under this Statute and other laws, to its annual income; such percentage shall be 12% for 2023 and 15% from 2024 onwards; however, the percentage for 2024 may be adjusted to 12% based on the review by the central competent authority in conjunction with the Ministry of Finance of how the international community enforces the Organization for Economic Cooperation and Development’s Global Minimum Corporate Tax; such adjustment shall be subject to the approval of the Executive Yuan before being promulgated by the central competent authority in conjunction with the Ministry of Finance.
The scope of applicability, eligibility requirements, thresholds, application deadline, application procedure, authority granting approval, calculation of the total creditable amount in the then-current year, and other related matters for the investment credits under the preceding five Paragraphs shall be determined by the central competent authority in conjunction with the Ministry of Finance.

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