Proposed Tax Incentives for Biotech and New Drugs Industry

A draft law has been proposed in the legislature in Taiwan to further the development of new drugs and biotechnology industry in this country. The draft law if passed into law as it currently stands will provide tax credits to businesses up to 35% of the dollar amount of their investment in related R&D and personnel training, and such tax credits may be utilized within five (5) years after the business has broken even and turned a profit. In addition, shareholders (that are incorporated as a corporation) that hold the stock in a biotech company for no less than three (3) years may receive a 20% tax credit which is equal to the dollar amount of their investment provided that they hold the investment no less than three (3) years, and this tax credit may be used to offset its income tax in a period of five (5) years. As to the grant of stock or stock warrants to desirable employees, no income tax will be incurred until the day the stock is disposed of at a profit.