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Taiwan Planed Major Promoting Program for Biotechnology and Pharmaceutical Industry

Taiwan Government Lauched the “Biotechnology Action Plan”

The Taiwan Government has planned to boost the support and develop local industries across the following six major sectors: biotechnology, tourism, health care, green energy, innovative culture and post-modern agriculture. As the biotechnology industry has reached its maturity by the promulgation of "Biotech and New Pharmaceutical Development Act" in July, 2007, it will be the first to take the lead among the above sectors. Thus, the Executive Yuan has launched the Biotechnology Action Plan as the first project in building the leading industry sectors, to upgrade local industries and stimulate future economic growth.

Taiwan Government Planed to Promote the Biotechnology and Other newly Industries by Investing Two Hundred Billion

To expand every industrial scale, enhance industrial value, increase the value around the main industrial field, and to encourage the industrial development by government investments for creating the civil working opportunities to reach the goal of continuous economic development, the Executive Yuan Economic Establishment commission has expressed that, the government has selected six newly industrials including "Biotechnology", "Green Energy", "Refined Agriculture", "Tourism", "Medicare", and "Culture Originality" on November 19, 2009 to promote our national economic growth. The government will invest two hundred billion NT dollars to support the industrial development aggressively and to enhance the social investments from year 2009 to 2012. According to a Chung-Hua Institution for Economic Research report, the future growth rate will reach 8.16% after the evaluation, Hence, the future of the industries seems to be quite bright.

Currently, the government plans to put money into six newly industries through the existing ways for investment. For instance, firstly, in accordance with the "Act For The Development Of Biotech And New Pharmaceuticals Industry" article 5 provision 1 ",for the purpose of promoting the Biotech and New Pharmaceuticals Industry, a Biotech and New Pharmaceuticals Company may, for a period of five years from the time it is subject to corporate income tax, enjoy a reduction in its corporate income tax payable for up to thirty-five percent (35%) of the total funds invested in research and development ("R&D") and personnel training each year; provided, however, that if the R&D expenditure of a particular year exceeds the average R&D expenditure of the previous two years or if the personnel training expenditure of a particular year exceeds the average personnel training expenditure of the previous two years, fifty percent (50%) of the amount in excess of the average may be used to credit against the amount of corporate income tax payable. Secondly, according to same act of the article 6 provision 1 ", in order to encourage the establishment or expansion of Bio tech and New Pharmaceuticals Companies, a profit-seeking enterprise that (i) subscribes for the stock issued by a Biotech and New Pharmaceuticals Company at the time of the latter's establishment or subsequent expansion; and (ii) has been a registered shareholder of the Biotech and New Pharmaceuticals Company for a period of three (3) years or more, may, for a period of five years from the time it is subject to corporate income tax, enjoy a reduction in its corporate income tax payable for up to twenty percent (20%) of the total amount of price paid for the subscription of shares in such Biotech and New Pharmaceuticals Company; provided that such Biotech and New Pharmaceuticals Company has not applied for exemption from corporate income tax or shareholders investment credit based on the subscription price under other applicable laws and regulations. Thirdly, to promote the entire biotechnological industry development, the government has drafted the "Biotechnology Takeoff Package" for subsidizing the startup´s social investment companies which can satisfy the conditions to invest in "Drug discovery", "Medical Device" or other related biotech industries up to 5 billion with the capital invest in domestic industry over 50%, , with operating experience of multinational biotech investment companies with capital over 150 million in related industrial fields, and with the working experiences of doctor accumulated up to 60 years.

Additionally, the refined agriculture industry field has not only discovered the gene selected products, but also combined the tourism with farming business for new business model creation. According to the "Guidelines for Preferential Loans for the Upgrading of Tourism Enterprises" point 4 provision 1, the expenditure for spending on machine, instruments, land or repairing can be granted a preferential loan in accordance with the rule of point 6, and government will provide a subsidy of interest for loaning Tourism Enterprises with timely payments.

At last, Council for Economic Planning and Development also points out because most of technology industry has been impacted seriously by fluctuation of international prosperity due to conducting the export trade oriented strategy. Furthermore, the aspects of our export trade of technology industry have been impacted by the U.S. financial crisis and the economic decay in EU and US; and the industrial development seems to face the problem caused by over centralization in Taiwan. Hence, the current framework of domestic industry should be rearranged and to make it better by promoting the developmental project of six newly industries.

Taiwan Government Had Modifies Rules to Accelerate NDA Process and Facilitate Development of Clinical Studies in Taiwan

In July 2007, the "Biotech and New Pharmaceutical Development Act" modified many regulations related to pharmaceutical administration, taxes, and professionals in Taiwan. In addition, in order to facilitate the development of the biotechnology and pharmaceutical industries, the government has attempted to create a friendly environment for research and development by setting up appropriate regulations and application systems. These measures show that the Taiwanese government is keenly aware that these industries have huge potential value. To operate in coordination with the above Act and to better deal with the increasing productivity of pharmaceutical R&D programs in Taiwan, the Executive Yuan simplified the New Drug Application (NDA) process to facilitate the submission that required Certificate of Pharmaceutical Product (CPP) for drugs with new ingredients.

The current NDA process requires sponsors to submit documentation as specified by one of the following four options: (1) three CPPs from three of "ten medically-advanced countries," including Germany, the U.S., England, France, Japan, Switzerland, Canada, Australia, Belgium, and Sweden; (2) one CPP from the U.S., Japan, Canada, Australia, or England and one CPP from Germany, France, Switzerland, Sweden, or Belgium; (3) a Free Sale Certificate (FSC) from one of ten medically-advanced countries where the pharmaceuticals are originally produced and one CPP from one of the other nine countries; or (4) a CPP from the European Medicines Agency. Thus, the current NDA process requires sponsors to spend inordinate amounts of time and incur significant costs to acquire two or three FSCs or CPPs from ten medically-advanced countries in order to submit an NDA in Taiwan.

According to the new rules, sponsors will not have to submit above CPPs if (1) Phase I clinical studies have been conducted in Taiwan, and Phase III Pivotal Trial clinical studies have been simultaneously conducted both in Taiwan and in another country or (2) Phase II and Phase III Pivotal Trial clinical studies have been simultaneously conducted both in Taiwan and in another country. Besides, the required minimum numbers of patients were evaluated during each above phase. Therefore, sponsors who conduct clinical studies in Taiwan and in another country simultaneously could reduce their costs and shorten the NDA process in Taiwan.

The new rules aim to encourage international pharmaceutical companies to conduct clinical studies in Taiwan or to conduct such studies cooperatively with Taiwanese pharmaceutical companies. Such interactions will allow Taiwanese pharmaceutical companies to participate in development and implementation of international clinical studies in addition to benefiting from the shortened NDA process. Therefore, the R&D abilities and the internationalization of the Taiwanese pharmaceutical industry will be improved.

※Taiwan Planed Major Promoting Program for Biotechnology and Pharmaceutical Industry,STLI, https://stli.iii.org.tw/en/article-detail.aspx?d=6132&i=168&no=105&tp=2 (Date:2024/07/16)
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The Tax Benefit of “Act for Establishment and Administration of Science Parks” and the Relational Norms for Innovation

The Tax Benefit of “Act for Establishment and Administration of Science Parks” and the Relational Norms for Innovation 　　“Act for Establishment and Administration of Science Parks” was promulgated in 1979, and was amended entirely in May 15, 2018, announced in June 6. The title was revised from “Act for Establishment and Administration of Science ‘Industrial’ Parks” to “Act for Establishment and Administration of Science Parks” (it would be called “the Act” in this article). It was a significant transition from traditional manufacture into technological innovation. 　　For encouraging different innovative technology enter into the science park, there is tax benefit in the Act. When the park enterprises import machines, equipment, material and so on from foreign country, the import duties, commodity tax, and business tax shall be exempted; moreover, when the park enterprises export products and services, it will have given favorable business and commodity tax free.[1] Furthermore, the park bureaus also exempt collection of land rent.[2] If they have approval for importing or exporting products, they do not need to apply for permission.[3] In the sub-law, there is also regulations of bonding operation.[4] To sum up, for applying the benefit of the act, enterprises approved for establishment in science parks still require to manufacture products. Such regulations are confined to industrial industry. Innovative companies dedicate in software, big data, or customer service, rarely gain benefits from taxation. 　　In other norms,[5] there are also tax deduction or exemption for developing innovative industries. Based on promoting innovation, the enterprises following the laws of environmental protection, laborers’ safety, food safety and sanitation,[6] or investing in brand-new smart machines for their own utilize,[7] or licensing their intellectual property rights,[8] can deduct from its taxable income. In addition, the research creators from academic or research institutions,[9] or employee,[10] can declare deferral of the income tax payable for the shares distributed. In order to assist new invested innovative enterprises,[11] there are also relational benefit of tax. For upgrading the biotech and new pharmaceuticals enterprises, when they invest in human resource training, research and development, they can have deductible corporate income tax payable.[12] There is also tax favored benefits for small and medium enterprises in using of land, experiment of research, technology stocks, retaining of surplus, and additional employees hiring.[13] The present norms of tax are not only limiting in space or products but also encouraging in “research”. In other word, in each steps of the research of innovation, the enterprises still need to manufacture products from their own technology, fund and human resources. If the government could encourage open innovation with favored taxation, it would strengthen the capability of research and development for innovative enterprises. 　　Supporting the innovation by taxation, the government can achieve the goal of scientific development more quickly and encourage them accepting guidance. “New York State Business Incubator and Innovation Hot Spot Support Act” can be an example, [14]the innovative enterprises accepting the guidance from incubators will have the benefit of tax on “personal income”, “sales and use” and “corporation franchise”. Moreover, focusing on key industries and exemplary cases, there are also the norms of tax exemption and tax abatement in China for promoting the development of technology.[15]The benefit of tax is not only in research but also in “the process of research”. 　　To sum up, the government of Taiwan provides the benefit of tax for advancing the competition of outcomes in market, and for propelling the development of innovation. In order to accelerate the efficiency of scientific research, the government could draw lessons from America and China for enacting the norms about the benefit of tax and the constitution of guidance. [1] The Act §23. [2] Id. §24. [3] Id. §25. [4] Regulations Governing the Bonding Operations in Science Parks. [5] Such as Act for Development of Small and Medium Enterprises, Statute for Industrial Innovation, Act for the Development of Biotech and New Pharmaceuticals Industry. [6] Statute for Industrial Innovation §10. [7] Id. §10-1. [8] Id. §12-1. [9] Id. §12-2. [10] Id. §19-1. [11] Id. §23-1, §23-2, §23-3. [12] Act for the Development of Biotech and New Pharmaceuticals Industry §5, §6, §7. [13] Act for Development of Small and Medium Enterprises Chapter 4: §33 to §36-3. [14] New York State Department of Taxation and Finance Taxpayer Guidance Division, New York State Business Incubator and Innovation Hot Spot Support Act, Technical Memorandum TSB-M-14(1)C, (1)I, (2)S, at 1-6 (March 7, 2014), URL：http://www.wnyincubators.com/content/Innovation%20Hot%20Spot%20Technical%20Memorandum.pdf (last visited：December 18, 2019). [15] Enterprise Income Tax Law of the People’s Republic of China Chapter 4 “Preferential Tax Treatments”: §25 to §36 (2008 revised).

The Key Elements for Data Intermediaries to Deliver Their Promise

The Key Elements for Data Intermediaries to Deliver Their Promise 2022/12/13 　　As human history enters the era of data economy, data has become the new oil. It feeds artificial intelligence algorithms that are disrupting how advertising, healthcare, transportation, insurance, and many other industries work. The excitement of having data as a key production input lies in the fact that it is a non-rivalrous good that does not diminish by consumption.[1] However, the fact that people are reluctant in sharing data due to privacy and trade secrets considerations has been preventing countries to realize the full value of data. [2] 　　To release more data, policymakers and researchers have been exploring ways to overcome the trust dilemma. Of all the discussions, data intermediaries have become a major solution that governments are turning to. This article gives an overview of relevant policy developments concerning data intermediaries and a preliminary analysis of the key elements that policymakers should consider for data intermediaries to function well. I. Policy and Legal developments concerning data intermediaries 　　In order to unlock data’s full value, many countries have started to focus on data intermediaries. For example, in 2021, the UK’s Department for Digital, Culture, Media and Sport (DCMS) commissioned the Centre for Data Ethics and Innovation (CDEI) to publish a report on data intermediaries[3] , in response to the 2020 National Data Strategy.[4] In 2020, the European Commission published its draft Data Governance Act (DGA)[5] , which aims to build up trust in data intermediaries and data altruism organizations, in response to the 2020 European Strategy for Data.[6] The act was adopted and approved in mid-2022 by the Parliament and Council; and will apply from 24 September 2023.[7] The Japanese government has also promoted the establishment of data intermediaries since 2019, publishing guidance to establish regulations on data trust and data banks.[8] II. Key considerations for designing effective data intermediary policy 1.Evaluate which type of data intermediary works best in the targeted country 　　From CDEI’s report on data intermediaries and the confusion in DGA’s various versions of data intermediary’s definition, one could tell that there are many forms of data intermediaries. In fact, there are at least eight types of data intermediaries, including personal information management systems (PIMS), data custodians, data exchanges, industrial data platforms, data collaboratives, trusted third parties, data cooperatives, and data trusts.[9] Each type of data intermediary was designed to combat data-sharing issues in specific countries, cultures, and scenarios. Hence, policymakers need to evaluate which type of data intermediary is more suitable for their society and market culture, before investing more resources to promote them. 　　For example, data trust came from the concept of trust—a trustee managing a trustor’s property rights on behalf of his interest. This practice emerged in the middle ages in England and has since developed into case law.[10] Thus, the idea of data trust is easily understood and trusted by the British people and companies. As a result, British people are more willing to believe that data trusts will manage their data on their behalf in their best interest and share their valuable data, compared to countries without a strong legal history of trusts. With more people sharing their data, trusts would have more bargaining power to negotiate contract terms that are more beneficial to data subjects than what individual data owners could have achieved. However, this model would not necessarily work for other countries without a strong foundation of trust law. 2.Quality signals required to build trust: A government certificate system can help overcome the lemon market problem 　　The basis of trust in data intermediaries depends largely on whether the service provider is really neutral in its actions and does not reuse or sell off other parties’ data in secret. However, without a suitable way to signal their service quality, the market would end up with less high-quality service, as consumers would be reluctant to pay for higher-priced service that is more secure and trustworthy when they have no means to verify the exact quality.[11] This lemon market problem could only be solved by a certificate system established by actors that consumers trust, which in most cases is the government. 　　The EU government clearly grasped this issue as a major obstacle to the encouragement of trust in data intermediaries and thus tackles it with a government register and verification system. According to the Data Government Act, data intermediation services providers who intend to provide services are required to notify the competent authority with information on their legal status, form, ownership structure, relevant subsidiaries, address, public website, contact details, the type of service they intend to provide, the estimated start date of activities…etc. This information would be provided on a website for consumers to review. In addition, they can request the competent authority to confirm their legal compliance status, which would in turn verify them as reliable entities that can use the ‘data intermediation services provider recognised in the Union’ label. 3.Overcoming trust issues with technology that self-enforces privacy: privacy-enhancing technologies (PETs) 　　Even if there are verified data intermediation services available, businesses and consumers might still be reluctant to trust human organizations. A way to boost trust is to adopt technologies that self-enforces privacy. A real-world example is OpenSAFELY, a data intermediary implementing privacy-enhancing technologies (PETs) to provide health data sharing in a secure environment. Through a federated analytics system, researchers are able to conduct research with large volumes of healthcare data, without the ability to observe any data directly. Under such protection, UK NHS is willing to share its data for research purposes. The accuracy and timeliness of such research have provided key insights to inform the UK government in decision-making during the COVID-19 pandemic. 　　With the benefits it can bring, unsurprisingly, PETs-related policies have become quite popular around the globe. In June 2022, Singapore launched its Digital Trust Centre (DTC) for accelerating PETs development and also signed a Memorandum of Understanding with the International Centre of Expertise of Montreal for the Advancement of Artificial Intelligence (CEIMIA) to collaborate on PETs.[12] On September 7th, 2022, the UK Information Commissioners’ Office (ICO) published draft guidance on PETs.[13] Moreover, the U.K. and U.S. governments are collaborating on PETs prize challenges, announcing the first phase winners on November 10th, 2022.[14] We could reasonably predict that more PETs-related policies would emerge in the coming year. [1] Yan Carrière-Swallow and Vikram Haksar, The Economics of Data, IMFBlog (Sept. 23, 2019), https://blogs.imf.org/2019/09/23/the-economics-of-data/#:~:text=Data%20has%20become%20a%20key,including%20oil%2C%20in%20important%20ways (last visited July 22, 2022). [2] Frontier Economics, Increasing access to data across the economy: Report prepared for the Department for Digital, Culture, Media, and Sport (2021), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/974532/Frontier-access_to_data_report-26-03-2021.pdf (last visited July 22, 2022). [3] The Centre for Data Ethics and Innovation (CDEI), Unlocking the value of data: Exploring the role of data intermediaries (2021), https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1004925/Data_intermediaries_-_accessible_version.pdf (last visited June 17, 2022). [4] Please refer to the guidelines for the selection of sponsors of the 2022 Social Innovation Summit: https://www.gov.uk/government/publications/uk-national-data-strategy/national-data-strategy(last visited June 17, 2022). [5] Regulation of the European Parliament and of the Council on European data governance and amending Regulation (EU) 2018/1724 (Data Governance Act), 2020/0340 (COD) final (May 4, 2022). [6] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and The Committee of the Regions— A European strategy for data, COM/2020/66 final (Feb 19, 2020). [7] Proposal for a Regulation on European Data Governance, European Parliament Legislative Train Schedule, https://www.europarl.europa.eu/legislative-train/theme-a-europe-fit-for-the-digital-age/file-data-governance-act(last visited Aug 17, 2022). [8] 周晨蕙，〈日本資訊信託功能認定指引第二版〉，科技法律研究所，https://stli.iii.org.tw/article-detail.aspx?no=67&tp=5&d=8422（最後瀏覽日期︰2022/05/30）。 [9] CDEI, supra note 3. [10] Ada Lovelace Institute, Exploring legal mechanisms for data stewardship (2021), 30~31,https://www.adalovelaceinstitute.org/wp-content/uploads/2021/03/Legal-mechanisms-for-data-stewardship_report_Ada_AI-Council-2.pdf (last visited Aug 17, 2022). [11] George A. Akerlof, The Market for "Lemons": Quality Uncertainty and the Market Mechanism, THE QUARTERLY JOURNAL OF ECONOMICS, 84(3), 488-500 (1970). [12] IMDA, MOU Signing Between IMDA and CEIMIA is a Step Forward in Cross-border Collaboration on Privacy Enhancing Technology (PET) (2022),https://www.imda.gov.sg/-/media/Imda/Files/News-and-Events/Media-Room/Media-Releases/2022/06/MOU-bet-IMDA-and-CEIMIA---ATxSG-1-Jun-2022.pdf (last visited Nov. 28, 2022). [13] ICO publishes guidance on privacy enhancing technologies, ICO, https://ico.org.uk/about-the-ico/media-centre/news-and-blogs/2022/09/ico-publishes-guidance-on-privacy-enhancing-technologies/ (last visited Nov. 27, 2022). [14] U.K. and U.S. governments collaborate on prize challenges to accelerate development and adoption of privacy-enhancing technologies, GOV.UK, https://www.gov.uk/government/news/uk-and-us-governments-collaborate-on-prize-challenges-to-accelerate-development-and-adoption-of-privacy-enhancing-technologies (last visited Nov. 28, 2022); Winners Announced in First Phase of UK-US Privacy-Enhancing Technologies Prize Challenges, NIST, https://www.nist.gov/news-events/news/2022/11/winners-announced-first-phase-uk-us-privacy-enhancing-technologies-prize (last visited Nov. 28, 2022).

Taiwan Recent Regulatory Development- Promoting Biotech and New Pharmaceuticals Industry

Over the past twenty years, the Government has sought to cultivate the biopharmaceutical industry as one of the future major industry in Taiwan. Back in 1982, the Government has begun to regard biotechnology as a key technology in Technology Development Program, demonstrated that biotechnology is a vital technology in pursuit of future economic growth. Subsequently, the Government initiated national programs that incorporated biotechnology as a blueprint for future industrial development. In order to enhance our competitiveness and building an initial framework for the industry, The Executive Yuan has passed the Biotechnology Industry Promotion Plan. As the Government seeks to create future engines of growth by building an environment conducive for enterprise development, the Plan has been amended four times, and implemented measures focused on the following six areas: related law and regulations, R&D and applications, technology transfer and commercialization, personnel training, investment promotion and coordination, marketing information and marketing service. In 2002, the Executive Yuan approved the Challenge 2008, a six-year national development plan, pointing out biotechnology industry as one of the Two Trillion, Twin Stars industries. The Government planned for future economic growth by benefiting through the attributes of the biotechnology: high-tech, high-reward and less pollution. Thus, since 1997 the Strategic Review Board (SRB) under the Executive Yuan Science and Technology Advisory Panel has taken action in coordinating government policies with industry comments to form a sound policy for the biotechnology industry. Additionally, a well-established legal system for sufficient protection of intellectual property rights is the perquisite for building the industry, as the Government recognized the significance through amending and executing related laws and regulations. By stipulating data exclusivity and experimental use exception in the Pharmaceutical Affair Act, tax benefits provided in Statute for Upgrading Industries , Incentives for Production and R&D of Rare Disease Medicine, Incentives for Medical Technology Research and Development, provide funding measures in the Guidance of Reviewing Programs for Promoting Biotechnology Investment. Clearly, the government has great expectation for the industry through establishing a favorable environment by carrying out these policies and revising outdated regulations. Thus, the Legislative Yuan has passed the “Act for The Development of Biotechnology and New Pharmaceuticals Industry” in June, 2007, and immediately took effect in July. The relevant laws and regulations became effective as well, driving the industry in conducting researches on new drugs and manufacturing new products, increasing sales and expanding the industry to meet an international level. For a biopharmaceutical industry that requires long-term investment and costly R&D, incentive measures is vital to the industry’s survival before the product launches the market. Accordingly, this article will be introducing the recent important regulation that supports the biopharmaceutical industry in Taiwan, and analyzing the government’s policies. Biotechnology is increasingly gaining global attention for its potential in building future economic growth and generating significant profits. In an effort to support the biotechnology industry in Taiwan, the Government has made a step forward by enacting the “Act for the Development of Biotech and New Pharmaceutical Industry”. The biopharmaceutical industry is characterized as high-risk and high-reward, strong government support and a well-developed legal system plays a vital role from its establishment throughout the long term development. Therefore, the Act was enacted tailor to the Biotech and New Pharmaceutical Industry, primarily focuses on tax benefits, R&D activities, personnel recruitment and investment funding, in support of start-up companies and attracting a strong flow of funding worldwide. To pave the way for promoting the biopharmaceutical industry and the Biotech and New Pharmaceutical Company, here the article will be introducing the incentive measures provided in the Act, and supporting development of the industry, demonstrating the efforts made by the Government to build a “Bio-tech Island”. Reference “Act for Development of Biotech and New Pharmaceutical Industry”, webpage of Law and Regulations Database of the Republic of China. 4 July, 2007. Ministry of Justice, Taiwan. 5 Nov. 2008 http://law.moj.gov.tw/Eng/Fnews/FnewsContent.asp?msgid=3180&msgType=en&keyword=undefined

Introducing and analyzing the Scope and Benefits of the Regulation「Statute for Upgrading Industries」in The Biotechnology Industry in Taiwan

The recent important regulation for supporting the biopharmaceutical industry in Taiwan has been the 「Statute for Upgrading Industries」 (hereinafter referred to as 「the Statute」).The main purpose of the Statue is for upgrading all industry for future economic development, so it applies to various industries, ranging from agriculture, industrial and service businesses. In other words, the Statute does not offer incentive measures to biopharmaceutical industry in particular, but focuses on promoting the industry development in general. Statute for Upgrading Industry and Related Regulations Generally speaking, the Statute has a widespread influence on industry development in Taiwan. The incentive measures provided in the Statute is complicated and covered other related regulations under its legal framework. Thus, the article will be taking a multi-facet perspective in discussing the how Statute relates to the biopharmaceutical industry. 1 、 Scope of Application According to Article 1 of the Statute, the term 「industries」 refers to agricultural, industrial and service businesses. Consequently, nearly all kinds of industries fall under this definition, and the Statute is applicable to all of them. Moreover, in order to promote the development and application of emerging technology as well as cultivating the recognized industry, the Statute provides much more favorable terms to these industries. These emerging and major strategic industries includes computer, communication and consumer electronics (3C), precise mechanics and automation, aerospace, biomedical and chemical production, green technology, material science, nanotechnology, security and other product or service recognized by the Executive Yuan. 2 、 Tax Benefits The Statute offers several types of tax benefits, so the industry could receive sufficient reward in every way it could, and promote a sound cycle in creating new values through these benefits. (1) Benefits for the purchase of automation equipment The said procured equipment and technology over NTD600, 000 may credit a certain percentage of the investment against the amount of profit-seeking enterprise income tax payable for the then current year. For the purchase of production technology, 5% may be credited. For the purchase of equipment, 7% may be credited. And any investment plan that includes the purchasing of equipment for automation can qualify for a low-interest preferential loan. Besides, for science-based industrial company imported overseas equipment that is not manufacture by local manufactures, from January 1, 2002, the imported equipment shall be exempted from import and business tax. And if the company is a bonded factory, the raw materials to be imported from abroad by it shall also be exempt from import duties and business tax. (2) Benefits for R&D expenditure Expenditure concurred for developing new products, improving production technology, or improving label-providing technology may credit 30%of the investment against the amount of profit-seeking enterprise income tax payable for the then current year. Research expenditures of the current year exceeding the average research expenditure for the past two years, the excess in research expenditure shall be 50% deductible. Instruments and equipments purchased by for exclusive R&D purpose, experimentation, or quality inspection may be accelerated to two years. At last, Biotech and New Pharmaceuticals Company engages in R&D activities, such as Contract research Organization (CRO), may credit 30% of the investment against the amount of profit-seeking enterprise income tax payable. (3) Personnel Training When a company trained staff and registered for business-related course, may credit 30% of the training cost against the amount of profit-seeking enterprise income tax payable for the then current year. Where training expenses for the current year exceeds the two-year average, 50% of the excess portion may be credited. (4) Benefit for Newly Emerging Strategic Industries Corporate shareholders invest in newly emerging strategic industries are entitled to select one of the following tax benefits: A profit seeking enterprise may credit up to 20% of the price paid for acquisition of such stock against the profit seeking enterprise income tax. An individual may credit up to 10%. As of January and once every year, there will be a 1% reduction of the price paid for acquisition of such stock against the consolidated income tax payable in the then current year. A company, within two years from the beginning date for payment of the stock price by its shareholders, selects, with the approval of its shareholder meeting, the application of an exemption from profit-seeking enterprise income tax and waives the shareholders investment credit against payable income tax as mentioned above. However, that once the selection is made, no changes shall be allowed. (5) Benefits for Investment in Equipment or Technology Used for Pollution Control To prevent our environment from further pollution, the Government offers tax benefits to reward companies in making improvements. Investment in equipment or technology used for pollution control may credit 7% of the equipment expenditure, and 5% of the expenditure on technology against the amount of profit-seeking enterprise income tax payable for the then current year. For any equipment that has been verified in use and specialized in air pollution control, noise pollution control, vibration control, water pollution control, environmental surveillance and waste disposal, shall be exempt from import duties and business tax. And for investment plans that planned implementation of energy saving systems can apply for a low interest loan. (6) Incentive for Operation Headquarter To encourage companies to utilize worldwide resources and set up international operation network, if they established operation headquarters within the territory of the Republic of China reaching a specific size and bringing about significant economic benefit, their following incomes shall be exempted from profit-seeking enterprise income tax: The income derived from provision of management services or R&D services. The royalty payment received under its investments to its affiliates abroad. The investment return and asset disposal received under its investment to its affiliates abroad. (7) Exchange of Technology for Stock Option The emerging-industrycompany recognized by government, upon adoption of a resolution by a majority voting of the directors present at a meeting of its board of directors attended by two-thirds of the directors of the company, may issue stock options to corporation or individual in exchange for authorization or transfer of patent and technologies. (8) Deferral of Taxes on the Exchange of Technology for Shares Taxes on income earned by investors from the acquisition of shares in emerging-industry companies in exchange for technology will be deferred for five years, on condition that the shares exchanged for technology amount to more than 20% of the company's total stock equity and that the number of persons who obtain shares in exchange for technology does not exceed five. 3 、 Technical Assistance and Capital Investment The rapid industry development has been closely tied to the infusion of funds. In addition to tax benefits, the Statute incorporates regulations especially for technical assistance and capital investment as below: (1) In order to introduce or transfer advanced technologies, technical organization formed with the contribution of government shall provide appropriate technical assistance as required. (2) In order to advance technologies, enhance R&D activities and further upgrade industries, the relevant central government authorities in charge of end enterprises may promote the implementation of industrial and technological projects by providing subsidies to such R&D projects. (3) In order to assist the start-up of domestic small-medium technological enterprises and the overall upgrading of the entire industries, guidance and assistance shall be provided for the development of venture capital enterprises.

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