Reported 7 months ago
During a legislative inquiry at the Legislative Yuan on June 12, 2024, Minister of Economic Affairs Guo Zhixuan indicated that the Industry Innovation Act, also known as the 'Taiwan Semiconductor Law,' providing tax incentives under Section 10-2, was applicable this year, but MediaTek expressed disappointment yesterday (11) that the company did not benefit from the tax policy. Minister of Economic Affairs Guo Zhixuan promised to 'help out' in response. During the inquiry, it was highlighted that while Taiwan's semiconductor industry leader MediaTek excels in software design and can compete with US chip design companies in the field of chip design, the government focuses more on hardware investment and neglects software investment. Minister Guo Zhixuan assured that they would provide assistance in this regard. MediaTek stated that the main investment of IC design companies is in the salaries of R&D personnel, not in large-scale equipment capital expenditures. They urged the Ministry of Finance to consider expanding tax deductions as seen in countries like South Korea, the US, and Mainland China, aiming to widen the individual R&D and equipment deduction limits to extend more substantial benefits to Taiwan's IC design industry. MediaTek emphasized its long-term investment in Taiwan, nurturing and enhancing Taiwan's industrial R&D talents and quality, with over NT$1.4 trillion in orders placed in Taiwan in the past 10 years, contributing to over NT$1,000 billion in corporate income tax and over NT$2,000 billion in tax revenue throughout the industry chain. The Article 10-2 of the Industrial Innovation Act sets high thresholds for R&D and equipment expenses; key industries meeting conditions, such as 25% in R&D expenses and 5% in new equipment or machinery purchases for advanced production processes, can offset corporate income tax for that year. In addition to Section 10-2, Section 10-1 of the Act also includes tax incentives for 5G and smart machinery, with the Ministry of Economic Affairs indicating a potential extension at the end of this year and considering adding investments in AI and low-carbon areas for deduction.
Source: YAHOO