Industrial Innovation Statute Article 10-1

For the purpose of optimizing industrial structure to achieve smart transformation and to encourage diversified and innovative applications, where a company or limited partnership has not committed material violation of any environmental protection, labor, or food safety or sanitation laws in the past three years, and has invested in the brand new hardware, software, technology or technical services in connection with brand-new smart machines, introduction of 5th-generation mobile networks, cyber security products or services, artificial intelligence products or services, and energy conservation and carbon reduction for its own use between January 1, 2025 and December 31, 2029, with an expenditure of NT$1 million or more and less than NT$2 billion in the same taxable year, may select one of the following credits against the payable profit-seeking enterprise income tax; once selected, it cannot be changed. The amount of the investment tax credit for each year is limited to 30% of the payable profit-seeking enterprise income tax in the then-current year:1. Up to five percent of the expenditure may be credited against the payable profit-seeking enterprise income tax in the then-current year.2. Up to three percent of the expenditure may be credited against the payable profit-seeking enterprise income tax in each of the three years from the then-current year.Where a company or limited partnership is concurrently receiving the investment credit under the preceding paragraph and/or other types of investment credit in the same year, the total amount creditable in the then-current year shall not exceed 50% of the payable profit-seeking enterprise income tax of the then-current year, unless, as stipulated by other applicable laws, the then-current year is the final creditable year and there is no limitation on the creditable amount.The term “smart machines” under Paragraph 1 refers to smart technology elements that utilize robots, digital management, clicks-and-mortar integration, or additive manufacturing, and having smart functions that produce information visualization, fault prediction, accuracy compensation, automatic parameter setting, automatic control, automatic scheduling, application service software, flexible production, or mixed-model production.The term “5th-generation mobile networks” under Paragraph 1 refers to the technological elements, equipment (including equipment needed for testing) or vertical application systems related to 5th generation mobile networks that utilize medium frequency/high frequency communications meeting the specifications of Release 15 of the 3rd Generation Partnership Project, large numbers of antenna arrays, network slicing, network virtualization, software-defined networking and edge computing to increase production efficacy or to provide smart services.The term “cyber security products or services” under Paragraph 1 refers to the hardware, software, technology or technical services used in connection with the safeguard of terminal and mobile devices, maintenance of network security and/or the maintenance of data and cloud security to prevent information and communication system or information from unauthorized access, use, control, disclosure, sabotage, alteration, destruction or other breaches to assure its confidentiality, integrity and availability.The term “artificial intelligence products or services” under Paragraph 1 refers to the hardware, software, technologies or technical services that use technology elements of machine learning algorithms, deep learning algorithms, large language models or natural language processing to imitate human intelligence for cognition, learning and inference, and can use various types of data on a large scale for various applications such as identification, classification or generation required by different industries, and optimize business operations or manufacturing efficiency.The term “energy conservation and carbon reduction” under Paragraph 1 refers to the use of low-carbon technology elements, such as energy conservation of public utilities or optimization of manufacturing process, to improve energy efficiency, reduce energy or resource consumption, and thereby reduce greenhouse gas emissions.A company or limited partnership applying for the investment credit under Paragraph 1 shall submit an investment scheme capable of generating certain effects to the central authority in charge of the industry concerned for approval on a case-by-case basis, and may apply only once in each taxable year.The regulations governing the scope of applicability, investment schemes capable of generating certain effects, application deadline, application procedure, reviewing authority, tax credit rate, calculation of the total creditable amount in the then-current year, and other related matters for investment credit in smart machines, 5th-generation mobile networks, cyber security products or services, artificial intelligence products or services, and energy conservation and carbon reduction under the preceding eight paragraphs shall be prescribed by the central competent authority in consultation with the Ministry of Finance.