Amendment to the Estate and Gift Tax Act provide progressive tax rates ─ On April 25, 2017, the Legislative Yuan approved the amendments to the Estate and Gift Tax Act, where the current 10% uni-rate for estate tax and gift tax is replaced by a progressive tax rate system with rates at 10%, 15% and 20%. The increased tax revenue as a result of the higher rates will be allocated entirely to long-term care spending. (I-Chen Wu)

Amendment to the Income Basic Tax Act expends the CFC rules to individual shareholders ─ On April 21, 2017, the Legislative Yuan approved the Income Basic Tax Act amendment, which provides that the “Controlled Foreign Company” (“CFC”) rules will be applicable to individual shareholders of foreign company as an additional anti-avoidance measure. In the future, if an individual residient in Taiwan and his/her related parties own, either directly or indirectly, an aggregate of 50% or more shares or capital of a foreign company which is organized in a low tax rate jurisdiction, or have significant influence over such a foreign company and he/she, together with his/her spouse and second degree relatives, collectively hold 10% or more shares or capital in that foreign company, said individual shareholder shall include the earning of the foreign company, prorated by his/her shareholding percentage therein, as offshore income for purpose of calculation of his/her alternative minimum tax. (I-Chen Wu)

The Financial Supervisory Commission (“FSC”) announced partial amendments to the “Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries” Notable amendments thereof include: (1) the board of directors shall be ultimately responsible for the internal control system; (2) the director’s code of conduct shall include director’s duty to adequately and swiftly handle and notify the situation where the company could sustain material damages; (3) the accountant audit of internal control system shall include both domestic and foreign business units of the company; (4) the internal audit unit shall timely report to the directors and the supervisors in accordance with the “materiality principle” after completion of, or receipt of the inspection report from, any domestic or foreign competent authorities. (Queenie Chen)

The National Communication Committee (“NCC”) promogated the Regulations Governing the Resolution of Dispute between the Television System Operator and Channel Provider – The Cable Radio and Television Act provides that interested parties may request the competent authority to mediate disputes concerning channel transmission, terms of authorization, and determination of the number of households between system operator and channel provider, or disputes among system operators. For supplementing enforcement of the law, the NCC promulgated the “Regulations Governing Resolution by the NCC of Dispute between Television System Operator and Channel Provider”. Any affoementioned type of dispute can be submitted to the NCC for mediation by request, and upon conclusion of such mediation, the result will be binding upon the participating parties. (Leonard Chen)