Regulations Governing Tax Credit for Businesses Investing in Motion Picture Production Enterprises for the Production of Domestically Produced Motion Pictures Article 7

If, after finishing a domestically produced motion picture investment and production plan but prior to obtaining a completion certificate, a newly established or expanded motion picture enterprise carries out a reduction of capitalization that results in its total capitalization being lower than that specified in the Paragraph 1, Article 5 definition of a sizable motion picture enterprise, its business shareholders shall not be eligible to apply for investment credits. Business shareholders in a motion picture production enterprise that have already enjoyed tax credits in connection with the investment and production plan shall refund them. An exception shall be made for cases in which funds are used solely to make up for losses. However, if after deducting capitalization reductions, a capitalization increase leaves a motion picture production enterprise still meeting the Paragraph 5, Article 1 definition of a sizable enterprise, business shareholders shall refund a portion of tax credit they enjoyed calculated according to the ratio of the capitalization reduction to the initial capitalization on establishment or capitalization increase for expansion.If the GIO does not issue the completion certificate, the applicant’s local tax bureau shall seek refunds of credits made in connection with the investment and production plan.When repaying tax credits to the local tax bureau in accordance with the preceding two paragraphs, interest on said credits shall be tallied on a daily basis in line with the one-year fixed savings deposit rate posted by Chunghwa Post Co. Ltd. beginning the day following the last day of the income-tax filing period and ending on the day payment is made.