Financial Holding Company Act Article 50

With regard to transactions between a financial holding company and its Subsidiary, or, between a financial holding company or the subsidiary of a financial holding company, and domestic or overseas individuals, profit-seeking enterprises, or educational, cultural, social welfare, charitable or [other] groups, where the amortization of income, cost, expenses, profits and losses are based on a non-arm’s-length arrangement for purposes of avoiding or reducing the obligations of a taxpayer, the financial holding company or subsidiary has improperly, for itself or others, sought to avoid or reduce tax obligations by means of the acquisition of shares, asset transfer, or other fraudulent arrangements, an auditing agency may, upon report to and approval of the competent authority, adjust such income and tax payable based on normal business practices or [other relevant] information for purposes of the accurate calculation of the income and taxes payable by the relevant taxpayer. However, the above shall not apply to transactions between a financial holding company and a domestic subsidiary in which the financial holding company holds over ninety percent (90%) of the outstanding issued shares.The consolidated tax reporting provisions of the preceding Article shall not be applied to a financial holding company or its Subsidiary for the year in which an auditing agency, in accordance with the provisions of the preceding paragraph, has adjusted the income and tax payable for such financial holding company or subsidiary.