All those profit-seeking enterprises which are subject to the application of the Labor Standards Act may each year set aside an amount within the limit of no more than fifteen per cent of the total salaries and wages paid in that year, as worker retirement reserve according to the Labor Standards Act or as labor pension or annuity insurance premiums according to the Labor Pension Act, and the appropriation thus made may be considered as expenses of the year.
Any profit-seeking enterprise which is not subject to the application of the Labor Standards Act and has established rules for the retirement of staff employees and workers may each year set aside a reserve for retirement pensions of no more than four per cent of the total salaries and wages paid in that year. However, in the case where any profit-seeking enterprise has set aside a retirement fund for staff employees and such fund is operated independently of the aforesaid profit-seeking enterprise under a separate means of custody, operation, distribution, etc. in conformity with the regulations as prescribed by the Ministry of Finance, such profit-seeking enterprise may each year appropriate such retirement reserve within the limit of no more than eight per cent of the total salaries and wages paid in that year and may further consider them as expenses of the year.
Where a retirement fund for workers, or a reserve for retirement pensions for staff employees has been set up pursuant to the provisions of the above two paragraphs, payment of retirement pensions or severance pay in accordance with the regulations shall be paid first from such fund or reserve when staff employees and workers retire or are dismissed henceforward, and only when the fund or the reserve is insufficient to meet requirements, then such payment may be considered as expenses of the year of payment.
In computing income during liquidation proceeding upon dissolution, closure, merger or transfer of ownership of a profit-seeking enterprise in accordance with the provisions of Article 75, the accumulative balance of the retirement fund for workers or the reserve for retirement pensions should transfer to the current year's profit and handled accordingly.