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LEGAL UPDATES - TAK Associes and Ecovis International

Suspension of Business Ordered by the CDC: Wages May Be Negotiated by the Employer and the Employee

2021.07.27

To prevent the spread of COVID-19 in Taiwan, the Taiwan Centers for Disease Control (the “CDC”) has ordered the closure of some specific work sites. The Ministry of Labor stated on June 15th, 2021 that during this period, wages for workers concerned by the closure, may be negotiated by the employer and the employee.

According to the Ministry of Labor, if the business is suspended because of the order of the CDC or the local government, wages may be negotiated by the employer and the employee, since the suspension of work is not caused by any of the parties. However, if the employer asks the employees to assist on disinfection work or other work during the suspension, the employer shall pay the usual salary.

In addition, regarding regular leave (usually on Saturday) and rest day (usually on Sunday), the employer shall pay to the employees the usual salary, based on article 39 of Labor Standards Act. As for the employer who actively suspends its business without order from the CDC, he shall be liable to pay the usual salary to the employees.
 

Source : Lawbank Website

Enhancing Tax Preference: Amendment of the Act for the Recruitment and Employment of Foreign Professionals

2021.07.27

The Legislative Yuan of Taiwan amended the Act for the Recruitment and Employment of Foreign Professionals (the “Act”) on June 18th, 2021. According to the new Act, the two-years working experience would no longer be a required criteria for applicants who graduated from the top 500 universities, as listed by the Ministry of Education (check the list here

Besides, one profession field is added to apply for the Taiwan Gold Card: professionals working in the National Defense field can be now eligible.

In addition, regarding tax preference, the Gold Card holder may now enjoy a reduced income tax for a maximum of 5 years based on the new Act, instead of 3 years with the previous Act.

At last, as for foreigners who enter Taiwan with a visit or a tourist visa and whose work permit or gold card have been approved afterwards, there is no need anymore to apply for status change from visit/tourist visa to resident visa, as they may apply for work permit and Gold Card directly to the Immigration Agency.

Source : Lawbank Website

Labor Regulation: Requirements for Taking Parental Leave Have Been Loosened Since July 2021

2021.07.27

The Taiwan Ministry of Labor (“Mol”) announced on June 7th, 2021 that Regulations for Implementing Unpaid Parental Leave for Raising Children are amended and shall be effective as from July 1st, 2021.

Before this amendment, employees shall take an unpaid parental leave for at least 6 months per application. Employees can now apply for parental leave for at least 30 days and no more than 6 months per application, and for a maximum of two applications before employee’s child turns 3 years old. The employee shall send a written application to his/her employer 10 days prior taking the leave.

A more favorable subsidy policy for parental leave allowance is launched as well. The authority shall allow an additional 20 % subsidy, the calculation of which is based on insured salary matrix, on top of the current subsidy policy of 60% of the regular salary.

Source : Ministry of Labor Website

Intellectual Property: Illegal Reproduction of Optical Discs leads to Heavier Penalty

2021.06.22.

According to articles 91, 91-1, and 100 of the Taiwan Copyright Act, criminal liabilities should be actionable only upon filing criminal complaint, except in case of reproducing or distributing (copyrighted) works by means of reproducing onto an optical disk (separate regime). Further, the penalty for reproducing onto an optical disk is serious (minimum prison term of six months). Some people filed a lawsuit in Taiwan to claim it was unconstitutional, as it imposed more heavy punishment (minimum sentence).

The Taiwan Constitutional Court has published an Interpretation No. 804 on May 21st, 2021, stating that the dual system “action only upon filing criminal complaint” and “serious penalty for reproducing onto an optical disk” are both constitutional.

According to Constitutional Court, the Copyright Act criminalizing the “reproduction” of copyrighted materials, “clearly conforms to the principle of the law,” and that the minimum sentence for pirating disks “does not violate the guarantees of personal freedom and equal protection stipulated in Article 8 of the Constitution.”

Regarding the “actionable only upon filing criminal complaint”, the Constitutional Court considered that the separation between reproducing “by the means of optical disks” and “by other means” are the decision of lawmakers regarding legislation policy, which does not violate the equal protection stipulated in Article 8 of the Constitution.

In conclusion, while there is a general legal system governing copyright, it is possible to have specific regimes imposing heavier sanctions than in the main legal system. Clearly, optical disks are governed by more deterrent rules.
 

Source : Lawbank Website

Labour Insurance Act: The Amendment of Enforcement Rules is effective as from June 8th, 2021

2021.06.22.

The Taiwan Ministry of Labor (the “MoL”) announced and published the amendment of Enforcement Rules of the Labor Insurance Act (the “Enforcement Rules”) on June 8th, 2021, regarding the provisions of application of insurance benefits.

Two major issues stated as following:

-  Requirement for foreign certificate:
If supportive documents are issued abroad in English language, there is no need, for some documents, to provide Chinese translations to be legalized abroad, when the insured and the beneficiary apply for insurance benefit.
 
-  Requirement for apply for disease benefits:
If supportive documents show the name of a disease, and the duration and procedure of the treatment, there is no need for a certificate of diagnosiswhen applying for disease benefits.

The amendment of the Enforcement Rules is effective as from the same day of the announcement, i. e. June 8th, 2021.

Source : The Executive Yuan Gazette Online

Tax Reduction : Applied to Salaries for Employees on Leave for Taking Care of Children during Suspension of Schools

2021.06.22.

According to Article 4 of the Taiwan Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens, “Authorities (agencies), enterprises, schools, legal entities, and organizations that pay employees' salary during their leave for disease prevention isolation may deduct 200% of the salary payment from its amount of income of the current year. The same shall apply to salaries for employees who take leave due to response measures conducted in accordance with orders issued by the Commander of the Central Epidemic Command Center during their leave period.”

According to the Ministry of Labor, if schools suspend classes due to the situation of COVID-19, and the parents (employees) need to stay at home to take care of the children (for those aged no more than 12 years old or for senior high school students with disability), employees may take leaves for taking care of children during this period. However, those salaries are to be negotiated between the employer and the employees.

Since the Taipei City Government and the New Taipei City Government ordered to  suspend the classes from May 18th, 2021 to May 28th, 2021, and according to the CDC, parents may take their leaves to take care of their children if needed.

The Ministry of Finance announced on May 17th, 2021 that if the employer pays salaries to the employees who take leaves, Article 4 of Special Act for Prevention, Relief and Revitalization Measures for Severe Pneumonia with Novel Pathogens shall apply, which means that the employer may deduct 200% of the salary amount from their taxable income of the current year.

Source : Ministry of Finance R.O.C Website

Currencies : Crypto Currencies Exchanges will be included in the New Act of Anti Money Laundering Regulations

2021.05.28

The Taiwan Executive Yuan announced in April 2021 that the Taiwan Ministry of Justice shall discuss with the central competent authorities to define the scope of enterprises handling virtual currency platform and transactions, and to report it to the Executive Yuan.

The definition of the scope will be effective as from July 1st, 2021. According to §4 of Art. 5 of the Money Laundering Control Act, “The Ministry of Justice shall, in consultation with the central competent authorities governing targeted businesses, make a report for the Executive Yuan to define the scope of enterprises handling financial leasing, virtual currency platforms or transactions listed".

The report shall also define the types of transactions applicable to the designated nonfinancial businesses or professions. For those businesses or professions, transaction reports are not required.

According to the new interpretation published by the Executive Yuan (Executive Yuan, Tai-Fa-Zi, No. 1100167722), the scope of enterprises handling virtual currency platforms and transactions shall include: engagement in the exchange between crypto currency and the New Taiwan dollar, foreign currency, or currencies issued by China, Hong Kong or Macau; exchange between crypto currencies; transfer, custody, and management of crypto currencies; providing related management tools for crypto currencies, as well as participating in and providing related financial service activities for crypto currency issuance or sales.

In addition, crypto currency is defined as referring to “the use of cryptography and distributed ledger technology or other similar technologies showing values that can be stored, exchanged, or transferred digitally, and used for payment or investment purposes". However, digital forms of the New Taiwan Dollar, foreign currencies, currencies and securities issued in China, Hong Kong or Macau, and other financial assets issued by the laws are not included.

 

Residence Rules : the Executive Yuan will enlarge the Scope of Rules on Permanent Residence for Foreign Professionals

2021.05.28

The Taiwan Executive Yuan has enacted the draft of the amendment of “Act for the Recruitment and Employment of Foreign Professionals”, to enlarge the scope of rules for permanent residence of foreign professionals, tax benefits, and social security, in order to attract foreign professionals and incite them to stay in Taiwan.

According to the draft amendment, the Ministry of Education will relax the requirements for foreign teachers to be employed at schools approved by the Ministry to teach children of foreign professionals.

Tax deductions for foreign special professionals will be extended from 3 to 5 years. Therefore, within this five-year period, foreign special professionals who make an annual income of NTD 3 million (around USD 106,000) or higher can deduct half of their salary from their gross income calculation.

In addition, the continuous residence requirement for foreign professionals to become eligible for permanent residence status will be lowered from 5 years to 3 years. And foreign professionals and their family members may immediately be eligible for the application of National Health Insurance (NHI), instead of the requirement to stay in Taiwan continuously for at least 6 months based on current laws.

Since this draft act is still under discussion, it is not confirmed yet for those who already hold such permit whether they will enjoy the same benefits or not. However, according to legal principles, new laws and regulations should be applicable to new applicants only, unless special provisions for earlier cases are prescribed

Labor Issue: New Act for Employment Injury Insurance and Protection is Prescribed and Announced

2021.05.28

 

The Taiwan Legislative Yuan promulgated the New Act for Employment Injury Insurance and Protection (“the Act”) on April 23rd, 2021, which was announced on April 30th, 2021 by the President of Taiwan. The effective date shall be released by the Executive Yuan, and relevant regulations and enforcement rules will be published soon.

The Act integrates laws and regulations prescribed in the Labor Insurance Act regarding employment injury issues and relevant provisions of Act for Protecting Worker of Occupational Accidents together aiming to have a comprehensive protection towards the employees.

Major issues are listed below:
- Compulsory insured scheme for every employee (no more threshold): business entities shall insure their employees under the Employment Injury Insurance. This is different from current regulations stating that business entities are only obligated to insured employee under Employment Injury Insurance if they count more than 4 employees

The payment of Insurance is much higher than before: the maximal insured monthly salary will be raised from $45,800 TWD to $72,800 TWD. Other payments items are included such as the expansion of the scope of medical payment and permanent disability benefits, injury/ disease benefits will be fully covered for the first 2 months on the basis of insured monthly salary and after this 70% of the basis will be covered, etc.

Scope of subsidy is also expanded: subsidies for nursing care, assistive device, and other items will be included and provided.

Other policies to be implemented: employment consulting service for the injured employee, tracking on physical check-up and relevant polices will also be considered into this system. 

 
 

ID Card : The New French National Identity Card

2021.05.28

The deployment of the new national identity card will enter into force in the French consular network before August 2nd, 2021.

It comes from the European framework, and all the members of European Union will have to put into circulation a new format of identity cards before August 2nd, 2021.

The new ID card will be in credit card format (such as the new driver's license), it will feature a highly secure electronic chip containing a photo of the holder's face and fingerprints. It will also be equipped with a visual electronic stamp for automatic reading. In this way, the authorities intend to prevent fraud and identity theft.

French nationality holders may apply for a new ID card when the current card is expired, not before. And the new ID card will be valid for 10 years.

The current process of French consular services of Taipei for obtaining an ID card has not changed.

Consumers Protection Act: Punitive Damages Stipulated Now Include Non-Pecuniary Damage - Toward a Greater Liability of Companies

2021.03.29

According to the Taiwan Consumer Protection Act, “the consumers may claim for a punitive damage up to 5 times the amount of actual damages as a result of injuries caused by the willful misconduct of traders; if such injuries are caused by gross negligence, a punitive damage up to 3 times the amount of the actual damages may be claimed; if such injuries caused by negligence, a punitive damage up to one time the amount of the actual damages may be claimed.”

However, the question of whether the calculation of punitive damage in the Consumer Protection Act includes the non-pecuniary damage or not, was not regulated clearly by the laws. The courts even made various decisions on that issue since there is no unified opinion regarding the question whether the purpose of non-pecuniary damage is to compensate the victim or punish the infringer.

The Supreme Court made a unified decision on February 26th, 2021: “the punitive damage stipulated in Consumer Protection Act includes non-pecuniary damage.”Therefore, in the future, when consumers file litigations against companies (manufacturer, distributors, etc.), they may claim both pecuniary and non-pecuniary damage based on Taiwan Civil Code and Consumer Protection Act (to compensate for the damage) and may claim for punitive damage based on Consumer Protection Act (for punishment) at the same time, which makes the scope of damages potentially much broader.

 

Food Labelling: Candies Containing More Than 5% Vegetable Oil Cannot Be Named As Chocolate

2021.03.29

The Taiwan Food and Drug Administration (“TFDA”) announced the amendment of Regulations Governing the Product Names and Labeling of Chocolate on March 2nd, 2021, adding the rule that candies or other goods containing more than 5% vegetable oil cannot be named as “chocolate”. The new rule will be valid from next year (2022).

According to TFDA and based on the former rules, candies or other goods containing more than 5% vegetable oil can be named as “cocoa butter replacer chocolate” on the labelsHowever, the oil in those chocolates shall be for the most part “cocoa butter”. Therefore, to make it more transparent, chocolate related goods shall not contain more than 5% of vegetable oil. Otherwise, such goods cannot be named as “chocolate”, but need to be changed to “cocoa flavored candies”.

 

Taxation: Taxation on Real Estate Transactions In Taiwan is Going Stricter

2021.03.29

The Executive Yuan announced, on March 11th, 2021, Taiwan's plans to implement stricter approach on property transactions prescribed in Income Tax Act (the “Act”).

The real estate transactions under an individual and a profit-seeking enterprise are all regulated based on this draft Act. The main draft amendments of the Act are listed below:

1. Transfer of presold house and its land shall be regulated as well;
2. Higher tax rate for the transaction made by an individual or by profit-seeking enterprise who holds the property for less than a certain period.
 
(1) For sale within less than 2 years of holding the real estate, the income earned from this transaction shall be taxed at a rate of 45%;
(2) For sale within 2 to 5 years of holding the real estate, the income earned from this transaction shall be taxed at a rate of 35%.

This amendment will have an influence on housing market in Taiwan. Nevertheless, the amendment of the Act is not effective yet. 

 

Revision Of Civil Code: Age of Majority Decreased From 20 To 18

2021. 01. 21

The Legislative Yuan has passed the amendment in the Civil Code on December 25th, 2020, lowering the age of majority from 20 to 18. Meanwhile, for the sake of equality, the minimum age of marriage for both men and women will be the same — 18 years old, which is no change for men, but was previously fixed to 16 years old for women.

However, in order to decrease the potential impact of the amendment on society, a buffer period is set before the amendments takes effect on January 1st, 2023. This is the first major change of this kind in the Civil Code since its enactment and implementation in 1929.

Concerning the minority foreigners, who can apply for Taiwan resident card based on his/her parent’s Taiwanese resident card, the valid age still remains 20, since the Immigration Act regulates that “the foreigner who is younger than the age of twenty (20) may apply for resident card based on his/her parent’s resident card.” (Article 23 of Immigration Act), and the article has not been revised accordingly. However, the authority may make the same amendment (from 20 to 18) before January 1st, 2023.

 

 

Statutory Marital Property Regime: Revision concerning Property between Husband and Wife

2021.01.21

According to the Civil Code, if two parties get married but do not choose their marital property regime, the statutory marital property regime will be applied to the two parties. One major issue in this regime is that the property of the two parties awarded after the marriage will be equally distributed to both parties upon the dissolution of the statutory marital property regime.

To clarify, the Legislative Yuan has passed the revision of Civil Code on December 30th, 2020 and added a paragraph in the article of the distribution after the dissolution of the statutory marital property regime, specifying the criteria of “distribution of housework, taking care of children, contributing to the family, period of living together and separately, time of acquiring the property after marriage, and economy status, etc.”

Therefore, in the future litigations of divorce or requesting the distribution after the dissolution of the statutory marital property regime, the court shall consider the aforementioned criteria and make the decision to adjust or waive the right for distribution after the dissolution of the statutory marital property regime.

This amendment will be valid 3 days after the publication of the president of Taiwan.

 

Taxation: Amendment on Income Basic Tax Act - Individual

2021.01.21

Ministry of Finance has published the draft amendment of Income Basic Tax Act (also known as Alternative Minimum Tax, ATM) (“the Act”) on December 10th, 2020 regarding the calculation of Individual’s basic tax, which became effective on January 1st, 2021.

The amount of basic income of an individual shall be the sum of the net taxable income as calculated pursuant to Act, and the amount shall be added up according to the items prescribed in Article 12 of the Act.

The new amendment on Article 12 indicates that the income derived from disposal of shares in non-listed or non-OTC companies shall be included in the tax base of the Income Basic Tax, unless otherwise the stock issuer is recognized by the authority to be a domestic innovative startup dealing with high-risk business and in that case transactions are to be made within 5 years as from the company is incorporated.

Patent: Relaxing the Regulation on Design Patents on November 1st

2020.11.30

Intellectual Property Office announced the partial amendment of Chapter III: Substantive Examination of Design Patents of The Examination Guidelines for Patents (“the Guideline”), effective on November 1st, 2020.

The purpose of this revision is to relax the restriction on regulation. In this revision, the limit stating that computer generated icon (CGI) and graphical user interface (GUI) design patent applications must be applied to physical objects, is removed accordingly.

The revision on the Guideline also let software businesses to obtain design patent protection more easily and more comprehensively by relaxing the requirements for disclosure of a design patent application.

Employment: Increasing the premium rate of labor ordinary insurance up to 11.5 % from year 2021

2020.11.30

Bureau of Labor Insurance announced that from January 1st, the premium rate for labor ordinary insurance shall increase up to 11.5% (including 1% for employment insurance) and the premium rate for Labor Insurance of occupational accident shall apply too.

The employer shall be aware of this adjustment on premium insurance and shall also take the adjustment of minimum wage to $ 24,000 TWD into consideration. Both shall be applied as from January 1st.

Corporation : Business Mergers And Acquisitions Act’s Draft Amendment

2020.11.30

On October 9th, the Ministry of Economic Affairs has issued the draft Amendment for Business Mergers and Acquisitions Act. The purpose is to protect shareholders’ rights and to loosen the restriction on merger and acquisition. The main draft revisions are as following:

1. Disclosing material personal interest of directors and majority shareholders is an obligation
A shareholder holding more than 10% shares of the company and who is also the director of the merged company shall disclose the material content of his personal interests related to the merger and acquisition. He shall also explain the reason for approval or objection while issuing a shareholders’ meeting notice.

2. Relaxing the restriction on short-form merger
If the total merged price paid by the company does not exceed 20% of the net worth, this is subject to the approval of an extraordinary meeting by the board of directors.

3. Providing better tax benefits 
The actual acquisition cost can be amortized within specified years, while intangible assets acquired are wider. Moreover, shareholders of the merged company may choose to delay their tax on dividend for 5 years.

 

Investment: Development Of Renewable Energy In Taiwan Is Progressing

2020.10.27

The electricity policy of Taiwan Government is to promote photovoltaic and wind turbine. The goal for Taiwan is to generate 20 percent of its electricity through renewable energy by 2025.  The capacity of photovoltaic is expected to reach 20 gigawatts (GW), as to wind turbine is more than 5.7 GW.

According to the statistics from Ministry of Economic Affairs, the total of invested amount for offshore wind power is up to 60.7 billion. Also, Taiwan Power Company is working on improvement of electric grid to

Ministry of Energy is also setting up a new department for photovoltaic, to arrange, plan, review the projects as from this September.

Foreigner Employment: Draft of the amendment on Act for the Recruitment and Employment of Foreign Professionals 

2020.10.27

Draft of the amendment on Act for the Recruitment and Employment of Foreign Professionals (“the Act”) has been released by the National Development Council on September 14th, 2020. The purpose of this draft amendment is to simplify the procedure of application for work permit and residence and to incite foreign professionals to stay in Taiwan.

The major draft amendment includes:
- Extension on term of taxation benefit: a foreign specialized professional will benefit from the tax preference at the first application, covering from 3 to 5 years.
- Relaxation on application conditions for permanent residence: according to the draft amendment, foreign professionals are eligible to apply for permanent residence, as long as they stay in Taiwan for 5 consecutive years, and foreign specialized professionals for 3 consecutive years; as long as they stay in Taiwan 183 days per year on average.

Other amendment on other fields like requirement of profession, dependent residence conditions, and health insurance matter are discussed.

National Development Council will collect opinions to write further amendment in the near future.

Corporation : Special Shares With Multiple Rights of Private Company

2020.10.27

According to Article 157 of Company Act, the private company (“the Company”) in Taiwan is capable to issue special shares under certain criteria, that shall be prescribed in the article of incorporation (“AoI”) of the Company.

One of the criteria indicates that the Company can have multiple voting right or veto power over specific matters. However, it is not specifically prescribed in the conditions of voting right in the article. To clarify this criteria, the Ministry of Economic Affairs further announced an interpretation on August 13th 2020.

The latter stipulates that if the Company intends to have special shares with multiple voting rights over specific matters or to exclude special shares from exercising multiple rights over specific matter, this shall be to the discretion of company’s shareholders, as long as it is prescribed in AoI of the Company, in compliance with the law.

Amendment on guidelines of furlough for local labor authority

2020.08.26

In July 2020, the Ministry of Labor (MOL) announced that local labor authorities shall follow revised guidelines to exam reporting of furlough from business entity and make a clear report line to its supervised authority.  The labor authority shall focus on the following matters:

1.  Furlough shall be effective under the consent between business entity and the employee.
2. Furlough shall be reported to labor authorities actively, and if there is a change of prescribed furlough, business entities shall report to labor authorities from time to time.
3.  Furlough shall be constructed on the basis of furlough agreement provided by the MOL.
4.  If labor authorities receive any complaint regarding furlough issue, the authorities will initiate examination procedure and other actions.

Business entities shall therefore be more cautious on procedural issues and, substantive matters (wage calculation, working hours, etc.) when implementing furlough policies for employees.

 

Specialized Business Court Business Disputes Procedure Act will be effective in July 2021

2020.08.25

On January 15, 2020, was announced the Business Disputes Procedure Act (the Act) to be effective by July 1st, 2021.  The enforcement of this Act will change the procedure, the measurement and other related regulations involving a business dispute.

It refers to cases involving operations of at least NT$ 100 million for listed company. These business cases shall be settled in a prompt manner. Special Business court is used to tackle with these issues under the Act. Whenever the dispute arises in connection with those cases, the dispute shall be settled in Special Business Court and shall follow the procedure of the Act.

It is mandatory to assign lawyers to tackle with business cases. Mediation procedure is also mandatory to undergo with expertise of related fields, and has to last up to 60 days. Only if no agreement is reached, the parties would enter litigation procedure.

Also, this procedure adapts technological measurements, such as, filing brief and submitting evidence through internet; the hearing can also be handled via video conference. This may reduce time of transmission of the documents, transportation and thus can speed up the whole hearing procedure.

Other new approaches, such as inquiring system, professional witness, secret protective order, are integrated into the Act. Related regulations, assignment of lawyers, calculation on remuneration of lawyers, procedure on brief transmission, etc., are under drafting to finalize the enforcement of the Act.

 

COVID-19: New policy on entering Taiwan as from August 1st, 2020

08.01.2020

On August 1st, 2020, National Immigration Agency of the Ministry of the Interior (MOI), announced a new policy on entering Taiwan in this difficult time of COVID-19.

1.  People are subject to a 14-day quarantine after entering Taiwan:
Holders of Taiwanese nationality, and foreigners holding legal alien resident certificate (ARC) or alien permanent resident certificate (APRC) shall be subject to a 14-day quarantine.

2.  People shall submit the a negative test for COVID-19 three days before boarding, and are subject to a 14-day quarantine:
Applicable to non-holders of ARC or APRC.

3.  People from Hong-Kong and Macau shall submit a negative test for COVID-19 three days before boarding, and are subject to a 14-day quarantine after entering Taiwan, if:
 (1) They are holding a special permit for business’ purpose, humanity reasons; or
 (2) They are students holding legal entry permit issued by Ministry of Education.

 4. People from Mainland China
 (1) People subject to a 14-day quarantine after entering Taiwan:
A. Applicable to a Taiwanese spouse or a Chinese kid less than two-years-old who has a Taiwanese parent who holds a legal residential certificate.
B. Applicable to people who are graduating students approved by the Ministry of Education.
 (2) People shall submit the negative test for COVID-19 three days before boarding, and are subject   to a 14-day quarantine after entering Taiwan.
Applicable to people accompanying a kid to enter Taiwan who hold legal entry permit due to family reunion.

 

Accelerated Examination Program of Trademark Application

04.27.2020

The number of trademark applications has been skyrocketing for the past years in Taiwan with a record of 86,794 applications in 2019. The Intellectual Property Office (“the IPO”) was thus mandated to speed up the application procedure to meet the needs of applicants, and to ensure robust protection against infringement.

The trademark examination procedure suffers from being under-staffed, which encouraged the IPO to introduce an accelerated examination program. This fast track mechanism will shorten the examination term for trademark application from 5 to 4 months.

This program will begin on May 1st with online applications. Graphic trademarks (i.e. any sign with distinctiveness: words, devices, symbols, colors, ...) shall be subject to this application, while trademarks in three-dimensional shapes, motions, holograms, sounds or certification marks, collective membership marks, and collective trademarks are excluded from this program.

Name of graphic trademarks must be consistent with the reference provided by the IPO and the application fee can be paid online.

Labor Issue: New Compliant Approach Against Sexual Harassment

04.27.2020

The Minister of Labor (“MOL”) announced the amendment to the Regulations for Establishing Measures of Prevention, Correction, Complaint and Punishment of Sexual Harassment at Workplace to protect employees or candidates’ rights when suffering from sexual harassment at work.

According to the current Regulationsany employer with over 30 employees is required to set up measures of prevention, correction, complaint and punishment of sexual harassment. These measures shall be then posted in the workplace and be acknowledged by all employees.

In case of sexual harrasment, the employee or candidate will have two channels of protection, either through the internal complain channel, or through external complain with local authority if the perpetrator is the employer. The employer is obligated to add this amendment to its current measures.

The amendment of the Regulations concerns more than 30,000 employers and will be enforced starting November 1st.  Any failure to abide by this amendment will result in fines ranging from 20,000 to 300,000 NTD.

Regulation for Subsidy Under Quarantine of COVID-19

04.27.2020

The government issued the Special Act of COVID-19 Prevention and Financial Reliefs and Related Regulations to counter the effects of COVID-19.

One of them, issued late March by the Ministry of Health and Welfare, allows citizens under quarantine to apply for subsidies of 1,000 NTD per day. The subsidy can however be perceived only if the applicant complies with the quarantine instructions given by the National Health Command Center.

The Ministry of Health also calls for subsidy applicants to act in good faith by, for instance, refraining from making unnecessary trips to Level 3 countries, as prescribed in the travel notice. Failure to comply with this rule will result in the exclusion from the subsidy program.

Draft Amendment Regarding Patent Application Online

2020.03.30

According to current Patent Act in Taiwan, applicants can file their patent application online, although the process can be time-consuming and the required documents too heavy to upload.

Consequently, the Ministry of Economic Affairs intends to facilitate the electronic filing mechanism under the Regulations Governing the Implementation of Filing Patent Applications and Services by Electronic Means.

Applicants will have non-electronic alternatives to file their application if file sizes are beyond a predetermined size, or if the information system encounters a breakdown.

Besides, the filing date shall differ depending on the filling medium. In general, the date on which the authority receives the file will be the filing date. However, if it is delivered by post-office, the postmark date will be the filing date

Measures In Response To The COVID-19 Coronavirus Outbreak

2020.03.30

The public and many industries are greatly affected by the COVID-19 coronavirus outbreak. As a result, the Taiwanese Government issued a Special Act of COVID-19 Prevention and Financial Reliefs on February 25th. The purpose of this Act is to support the public in preventing the disease and, when needed, recovering from it. The Act also provides financial relief to industries most impacted by the virus, whether financially or operationally

Regarding people in quarantine, professionals unable to work because they take care of family members in quarantine are entitled to a quarantine leave.  They may apply for a government-granted subsidy up to 1,000 NTD per day . Companies granting paid quarantine leave to their employees are entitled to tax reduction.

As regards industries, companies producing protective equipment or raw materials requisitioned by the government can apply for subsidy or compensation granted in the Act.

Additional measures will soon be taken by the Ministry of Labor, such as subsidy programs for employees with unpaid-leave and companies with operational difficulties.

 

Draft Amendment to Regulations On Foods Products' Labeling

2020.03.30

On March 11th, the Ministry of Health and Welfare promulgated a draft amendment to the Regulations Governing of Criteria for the Label, Promotion and Advertisement of Foods and Food Products Identified as False, Exaggerated, Misleading or Having Medical Efficacy.

Under the amendment, food products labeled as “healthy” are prohibited unless they have been certified by the Health Food Control Act authorities. Such certification aims to avoid misleading labels and consumer confusion on products' health benefits.

This amendment will only be enforced starting January 1st, 2022, yet at this date, transgressing manufacturers will risk fines ranging from 40,000 NTD to 4,000,000 NTD. The authorities are also entitled to recall and correct the label within a prescribed time period.

 

Taiwan Taxation Rules On Share Transfer

2020.03.30

According to current Patent Act in Taiwan, applicants can file their patent application online, although the process can be time-consuming and the required documents too heavy to upload.

Consequently, the Ministry of Economic Affairs intends to facilitate the electronic filing mechanism under the Regulations Governing the Implementation of Filing Patent Applications and Services by Electronic Means.

Applicants will have non-electronic alternatives to file their application if file sizes are beyond a predetermined size, or if the information system encounters a breakdown.

Besides, the filing date shall differ depending on the filling medium. In general, the date on which the authority receives the file will be the filing date. However, if it is delivered by post-office, the postmark date will be the filing date.

 

New Proceedings For Commercial Matters

2020.03.02

The President and the Administration Yuan published on January 15th the Intellectual Property Court and Commercial Court Organization Act and the Commercial Matter Proceeding Act. These new measures aim to promote economic development in Taiwan, and facilitate proceedings to reach fairer decisions in commercial disputes. It is the first time that major cases of commercial disputes will be handled by a professional court, namely the Commercial Court, rather than a common one.

According to the Commercial Matter Proceeding Act, major commercial cases will be referred to the Commercial Court, which will apply special proceedings to cases ranging from disputes of over 100 million NTD between a director and his company to insider tradingfinancial statement fraud or other criminal liabilities regulated by the Securities Transaction Act of over 100 million NTD. The court will also have authority over disputes in shareholders' or board of directors’ meeting.

Negotiation by mediation is required before judicial proceedings, and attorneys are to be present before the court. During the hearings, the parties may appoint expert witnesses to submit professional opinions and may propose inquiries to the other party. If any trade secrets are involved in the court files, the party may apply for a Secret Protective Order.

Draft Amendments To The Trademark Act

2020.03.02

In January, the Ministry of Economic Affairs (MOEA) announced draft amendments to the Trademark Act, following a thorough consultation with experts, scholars, as well as two consultation conferences and one public hearing..

In this draft, 14 articles are amended and 2 articles have been added.

Majors changes include: authorising attorneys at law or CPAs only, or anyone meeting the regulated qualifications, to be agent to practice trademark matters (1); introducing express examination for trademark application to accelerate the registration (2); removing the previous condition of refusing application for registration infringement trademark, to simplify the procedure. Instead, trademark could be examined to challenge its validity upon this ground and the interested party can be free from the 5-years statute of limitation prescribed in the current Trademark Act (3).

More Transparency and Flexibility For Copyright

2020.03.02

Taiwan Intellectual Property Office announced draft amendments to the Copyright Act of Taiwan on January 30th to clarify the definitions of the intangible use of copyright, such as public broadcast, public performance and public transmission, as a response to the widespread use of streaming media, e-books and IPTV.

According to the current Act, the copyright shall be assigned in its whole to either the author or its employer. The assignment of the copyright ownership will be more flexible, allowing the parties to agree to allocate the copyright partly, or to assign to a third party.

The exclusion of copyright infringement will also be more specific. To clarify Article 65's authorisation of "fair use" of copyright, new amendment lists circumstances where copyrights are not infringed under Article 44 to Article 63, such as use of works for the purpose of teaching, education, public policy announcement, news report and research. 

Damages for infringement may be calculated based on the applicable royalty fees under the new amendment, which will be a relief to the copyright owner, currently burdened to prove the actual damage amount incurred by the infringement.

 

More Protection Of The Confidentiality of Trade Secret Cases

2020.01

On December 31st, 2019,  Taiwanese legislature amended the Trade Secret Acts, by introducing aconfidentiality order for investigation system . This partial amendment aims at strengthening the confidentiality of the trade secret cases.

Beforehand, people involved in trade secret cases currently under investigation did not have the obligation to keep relevant information confidential, which increased the risk of disclosure. The amendment now allows prosecutors to issue a confidentiality order to designated parties, whom will thus be prohibited to disclose sensitive trade secret information to third parties. If the confidentiality order is violated, the person shall be liable to imprisonment of up to 3 years and/ or a fine not exceeding 1 million NTD, regardless of the location of the breach.

This amendment may increase the protection of companies’ trade secrets and is regarded as an incentive for the foreign investment.

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