The Management, Utilization, and Taxation of Repatriated Offshore Funds Act Article 8

An individual or a profit-seeking enterprise may apply for approval from the MOEA within one year from the date of depositing funds into the segregated foreign exchange deposit account to invest in the policy-targeted industries through the domestic venture capital enterprises or the private equity fund and withdraw the funds from the segregated foreign exchange deposit account for the investment.The period that an individual or a profit-seeking enterprise invests in domestic venture capital enterprises or the private equity fund under the preceding paragraph shall be no less than four years. The investment rate, which is the investment in the policy-targeted industries invested by the aforesaid invested domestic venture capital enterprises or the private equity fund over their total investment, shall reach a certain rate during the investment period. However, if the reason that the aforesaid invested domestic venture capital enterprises or the private equity fund is unable to meet the required investment rate during the investment period is not attributable to the individual or profit-seeking enterprise, said individual or profit-seeking enterprise may apply for a change in investment targets to other domestic venture capital enterprises or the private equity fund to the MOEA for approval within the investment period.An individual or a profit-seeking enterprise shall, by the end of January of each year during the investment period, report their investment progress for the preceding year and the invested venture capital enterprises’ or the private equity fund’s progress of investment in industries referred to in Paragraph 1 for the preceding year to the MOEA. An application for certificate of completion should be submitted to the MOEA within six months from the date of completing the investment; within six months from the date of obtaining the certificate of completion, an application for a 50% refund of tax paid under Paragraph 1 or 2 of Article 5 should be submitted to the tax authority-in-charge.When dealing with the matters described in the preceding three paragraphs, the MOEA may ask the central competent authorities of the respective industries referred to in Paragraph 1 to provide suggestions or assistance.In the cases that the funds withdrawn under Paragraph 1 are used for purposes other than investment in accordance with Paragraphs 1 and 2, or the investment progress is not reported to the MOEA for recordation in accordance with Paragraph 3 and still fails to be reported within the specified time limit upon notification by the MOEA, the MOEA shall notify the tax authority-in-charge that such involved funds shall be taxed at 20%. The tax already paid for the aforementioned funds under Paragraph 1 or 2 of Article 5 can be deducted from the aforementioned tax.An individual or a profit-seeking enterprise who fails to apply for investment in accordance with Paragraph 1, or has already applied for investment which is not approved by the MOEA, shall comply with Paragraph 2, Article 6. An individual or a profit-seeking enterprise who withdraws the funds from the segregated foreign exchange deposit account under an approved investment schedule but fails to use the funds in accordance with regulations shall deposit the funds back into the segregated foreign exchange deposit account and comply with Paragraph 2, Article 6.Regulations governing Paragraph 1’s scope of the policy-targeted industries and procedure of application for investment, Paragraph 2’s required investment rate and application procedure of changing investment targets, Paragraph 3’s procedure of report for recordation and application for certificate of application, and other related matters shall be prescribed by the MOEA and submitted to the Executive Yuan for approval. Regulations governing Paragraph 3’s application procedures of tax refund and other related matters shall be prescribed by the competent authority.