Focus of Policy
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Autonomous vehicles
The government is using advanced driver assistance systems (ADAS) as the basis for legislative amendments designed to improve traffic safety. -
Self-driving vehicles
Legal basis: Taiwan's national legislature in 2018 passed the "Unmanned Vehicles Technology Innovative Experimentation Act." Drawing upon the "regulatory sandbox" spirit, this act provides a statutory basis for loosely regulated experimental efforts to develop new types of unmanned vehicle technologies.
Testing sites: They include the Taiwan CAR Lab in Shalun, Tainan for testing vehicles such as mid-sized buses or smaller. Hutoushan Innovation Hub in Taoyuan City uses the Internet of Vehicles (IoV) & Smart Driving Center and Information Security IoT Center to test autonomous vehicles under a wide variety of simulated environments.
Tax Incentives
- The profit-seeking enterprise income tax rate is 20%.
- Up to 15% of the company's R&D expenditures may be deducted from its profit-seeking enterprise income tax for current year; or up to 10% of such expenditures may be credited over three years against the profit-seeking enterprise income tax payable by the company.
- Royalty payments to foreign companies for imported new production technologies or products that use patents, copyrights, or other special rights owned by foreign companies is, with the approval of the Industrial Development Bureau, MOEA, exempt from the corporate income tax.
- Imported machinery which local manufacturers cannot produce are eligible for duty-free treatment.
- Investment in smart machinery/5G: For investments of no less than NT$1 million and no more than NT$1 billion, either "5% of investment spending deducted from profit-seeking enterprise income tax (current FY)" or "3% of investment spending deducted from profit-seeking enterprise income tax, if total spending spread over three years" may be selected, but the total amount deducted may not exceed 30% of corporate income tax that year. The applicable period is expected to be extended to December 31, 2024.
- A company employee who has obtained stock compensation worth a combined total of less than NT$5 million and continuously held the stock while remaining in the company's employ for at least two years may choose to be taxed on the market price of the stock at either the time the stock was obtained or the time the stock is sold, whichever is lower.
- Foreign special professionals who meet criteria are eligible for a 50% deduction of total income tax for amounts exceeding NT$3 million.
- Companies that set up operations in export processing zones, science industrial parks, or free trade ports are eligible for exemptions on import duties, commodity tax, and business tax for the import of machinery and equipment, ingredients, fuel, materials, and semi-finished products for their own use.
- Companies that use undistributed earnings to engage in substantive investments may exclude the amount when calculating their profit-seeking enterprise income tax.
Research and Development Subsidies
Success Stories
Production and Technologies
- Toyota Tsusho has acquired a stake in FUKUTA Electric & Machinery, and the two entities plan to cooperate in developing motors for electric vehicles and plug-in hybrid vehicles (PHV). Kuozui Motors, which builds Toyotas under license for the domestic market, recently invested NT$6 billion to upgrade its production lines to begin turning out hybrid vehicles.
- Denso, a big Japanese automotive components manufacturer, took an equity stake in Cryomax Cooling System, which mainly produced auto radiators under the Cryomax brand and exported them as aftermarket products to Europe and North America.
Cross-industry Collaboration
In November 2019, Sumitomo Corporation invested in RAC Electric Vehicles, spending NT$126 million to obtain a 7% equity stake. Sumitomo will rely on RAC to perform electric bus manufacturing and related services, while RAC will rely on Sumitomo's marketing and services network to expand its international markets.
R&D and Testing Facilities
NVIDIA, a US maker of graphics chips, has signed a letter of intent to engage in cooperation with the National Applied Research Laboratories (NARLabs), which is subordinate to Taiwan's Ministry of Science and Technology. NVIDIA will take part in efforts to develop Taiwan's autonomous vehicle industry, and will cooperate with Taiwan CAR Lab on technology applications. In addition, Canadian auto parts maker Magna, has already had an R&D center in Taiwan for several years where the company has been working to develop ultrasonic sensors, parking/reverse assist systems, automotive imaging, and forward camera modules and systems. And now Magna is drawing up plans for an additional investment to engage in further R&D work on new technologies.
Talent Development
The Volkswagen Group Taiwan Training Academy that was established in Xizhi District of New Taipei City is Volkswagen's biggest training institution anywhere in Asia outside of mainland China. Recently, in order to embark upon Taiwan's electric vehicle market, Volkswagen established the "e-Mobility Center" to train professionals with special expertise in maintenance of Taiwan-made electric vehicles, and to engage in cooperation with Delta Electronics, Inc. on the development of EV charging infrastructure. In addition, Honda Taiwan is cooperating with technical and vocational schools in Pingtung County to train technicians and provide young graduates with employment opportunities.
Source: InvesTaiwan
Contact
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InvesTaiwan Service Center
Email:service@invest.org.tw / Information Window for Key Innovative Industries
Add: 10046 8F, No.1 Xiangyang Road, Taipei, Taiwan
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Key Innovative Industries in Taiwan - Next-Generation Vehicle (9.00MB)