Newsletter
INTERNET COMPANIES ELIGI-BLE FOR INVESTMENT TAX RELIEF
On 12 July 2000, the Executive Yuan renamed its Regulations Governing the Eligibility for In-vestment Tax Credits for Purchases of Equip-ment or Technology by Private Manufacturing Enterprises and Technical Service Enterprises, as the Regulations Governing the Eligibility for Investment Tax Credits for Purchases of Equipment or Technology by Internet Enter-prises, Manufacturing Enterprises and Technical Service Enterprises. The scope of eligibility for investment tax credit under the regulations therefore extends to include Internet companies.
The regulations defines Internet companies as specialized service companies providing dial-up services, leased line services, online services, network multimedia software and content ser-vices or system and application software services to organizations or individuals via the internet.
Some of the criteria for eligibility under the regulations have also been amended. The im-portant changes include the following: If due to exceptional circumstances an enterprise does not receive delivery of goods within two years from the order date, it may apply for an extension of up to two years. Where an enterprise purchases imported equipment through an agent, distributor or trading company, the order date is defined as the date when the purchase agreement is signed, and the delivery date as the date when the pur-chased items are delivered to the purchaser's place of business. Purchase is defined broadly to include hire purchase and financial lease.
It should be noted that although the amended regulations did not come into force until July 2000, businesses may apply for relief of corpo-rate income tax according to them in respect of any eligible purchases made after 1 January 2000.