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.