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財政部賦稅署-法規查詢主題專區

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法律與法規命令

Tax Act:
Regulations Governing Application of Accrued Income from Controlled Foreign Company for Profit-Seeking Enterprise
Article 3
Content:
The term "related parties" in the preceding article shall include affiliated enterprises and related parties other than the affiliated enterprises.
The term "affiliated enterprises" in the preceding paragraph shall refer to where there are any of the following situations between a profit-seeking enterprise and another domestic or foreign profit-seeking enterprise:
1.A profit-seeking enterprise directly or indirectly holds 20% or more of the total outstanding voting shares or capital stock in another profit-seeking enterprise.
2.Twenty percent or more of the total outstanding voting shares or capital stock in one or more profit-seeking enterprise are directly or indirectly owned or controlled by the same person.
3.A profit-seeking enterprise holds the highest percentage of the total outstanding voting shares or capital stock in another profit-seeking enterprise and such percentage reaches 10% or more.
4.One half or more of the executive shareholders or directors of a profit-seeking enterprise and those of another enterprise are the same.
5.The aggregate number of directors appointed by one profit-seeking enterprise and the number of directors appointed by one or more other enterprise(s) in which it directly or indirectly holds over 50% of the total outstanding voting shares or capital stock in another profit-seeking enterprise reaches one half or more of the total number of directors of the latter profit-seeking enterprise.
6.The chairman, general manager, or its equivalent or superior of one profit-seeking enterprise is that of another enterprise, or has the relation of a spouse or blood relation within the second degree with that of another profit-seeking enterprise.
7.A profit-seeking enterprise directly or indirectly controls the personnel, finance, or business operation of another profit-seeking enterprise, including:
(1)A profit-seeking enterprise appoints the general manager or its equivalent or superior of another profit-seeking enterprise.
(2)A profit-seeking enterprise that is not a financial institution lends money or guarantees loans to another profit-seeking enterprise to an amount representing 1/3 or more of its total assets.
(3)A profit-seeking enterprise cannot commence its production or business activities without the other enterprise's provision of patents, trademarks, copyrights, secret formulas, proprietary technology, or any franchises, in which the underlined sales of such production and business activities account for 50% or more of the total sales of the former profit-seeking enterprise in the same year.
(4)The price and terms of a profit-seeking enterprise's purchase of raw materials, components, and goods are controlled by another profit-seeking enterprise; and the underlined purchase of such raw materials, components and goods accounts for 50% or more of the total purchase of raw materials, components and goods of the former profit-seeking enterprise in the same year.
(5)The sales of products of a profit-seeking enterprise are controlled by another profit-seeking enterprise, and the underlined sales of such products account for 50% or more of the total sales of the former profit-seeking enterprise.
8.A profit-seeking enterprise and another one have entered into a joint venture agreement, or an agreement to conduct business jointly.
9.Other circumstances whereby a profit-seeking enterprise has control or major influence over the personnel, finance, business operation or management decisions of another profit-seeking enterprise.
If due to special market or economic factors both a profit-seeking enterprise and another profit-seeking enterprise have any one of the situations in Items 3 through 5, Subparagraph 7 of the preceding paragraph, but there is no substantial cross-control relation between the two profit-seeking enterprises, unless it is a case of a profit-seeking enterprise versus a public enterprise, or a case of an agent/distributor versus a monopolistic enterprise under Article 7 of the Fair Trade Act, which may be regarded as a case of two unaffiliated enterprises, the profit-seeking enterprise may provide sufficient evidentiary documents to their tax authorities for ratification before filing their annual income tax returns. Once the documents provided have been ratified, the two profit-seeking enterprises may be regarded as unaffiliated enterprises.
The term "related parties other than the affiliated enterprises" in the first paragraph shall refer to a domestic or foreign individual, or an educational, cultural, public welfare, or charity organization or group that has any of the following relations with the profit-seeking enterprise:
1.A foundation receives a donation from the profit-seeking enterprise in the amount representing 1/3 or more of the total funds in its balance sheet of such foundation.
2.The aggregate number of directors represented by a profit-seeking enterprise and its directors, supervisors, general manager, or its equivalent or superior, or the spouse or blood relations within the second degree of whom reach one half or more of the total number of directors of the foundation.
3.A profit-seeking enterprise’s directors, supervisors, general manager or its equivalent or superior, vice general managers, assistant general managers and department heads under the direct supervision of the general manager.
4.The spouses of a profit-seeking enterprise’s directors, supervisors, general manager, or its equivalent or superior.
5.The relatives within the second degree of a profit-seeking enterprise’s chairman of the board, or general manager or its equivalent and superior.
6.Other circumstances whereby a profit-seeking enterprise has control or major influence over the personnel, finance, business operations, or management decisions of another profit-seeking enterprise.
 Update:2018-04-24

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