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Chapter Law Content

Title: Statute for Industrial Innovation CH
Category: Ministry of Economic Affairs(經濟部)
Chapter Three - Grants or Guidance for Innovation Activities
Article 9
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.
Article 9-1
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.
Article 10
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.
Article 10-1
For the purpose of optimizing industrial structure and encouraging domestic industries to upgrade to smart technology and make multiple innovations and applications, where a company or limited partnership has not committed a severe violation of any environmental protection, labor, or food safety or sanitation laws in the past three years, and has invested in brand-new smart machines for its own use between January 1, 2019 and December 31, 2021, or has invested in brand-new hardware, software, technology or technical services introducing 5th-generation mobile networks between January 1, 2019 and December 31, 2022, by spending a total of NT$1 million up to NT$1 billion in the same taxable year, the company or limited partnership may select one of the following incentives for crediting the funds so invested by it against the profit-seeking enterprise income tax payable by it in the taxable year. 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 five percent of the annual spending sum may be credited against the profit-seeking enterprise income tax payable by it in the then current year.
2. Up to three percent of the annual spending sum may be credited against the profit-seeking Enterprise’s income tax payable by it in each of the three years from the then-current year.
Where a company or limited partnership is eligible for the investment credit under the preceding paragraph and other types of investment credit in a year, the total amount creditable in that year shall not exceed 50 percent of the profit-seeking enterprise income tax payable by it in the then-current year, unless the then-current year is the final year for using such credit and no cap is imposed on the creditable amount for that year according to other laws.
The smart machines under Paragraph 1 mean machines utilizing intelligence technology elements embodied in big data, artificial intelligence, the Internet of things, robots, lean management, digital management, clicks and mortar, additive manufacturing or sensors, and having the intelligent functions of production data visualization, fault prediction, accuracy compensation, automatic parameter setting, automatic control, automatic scheduling, application service software, flexible production, or mixed-model production.
The 5th-generation mobile networks under Paragraph 1 mean any systems using technological elements, equipment (including equipment needed for testing) or vertical application systems related to 5G mobile networks such as MF/HF communications, large numbers of antenna arrays, network slicing, network virtualization, software-defined networking and edge computing meeting the specifications of 3rd Generation Partnership Project Release 15 and beyond to increase efficiency in production or provide smart services.
A company or limited partnership applying for eligibility for the investment credit 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. Each company or limited partnership may apply for such investment credit only once in each taxable year.
The regulations governing the scope of eligibility for the tax credit for investment in smart machines or 5th-generation networks, investment schemes capable of generating certain effects under the preceding five paragraphs, the application deadline, the application procedure, the authority granting approval, the tax credit rate, calculation of the total creditable amount in the then-current year, and other related matters shall be prescribed by the central competent authority in consultation with the Ministry of Finance.
Article 11
(deleted)