Taiwan's Legislature on Tuesday passed an amendment that extends existing tax breaks for investment in biomedical research and development (R&amp;amp;D) while providing new tax benefits as part of an effort to promote the development of the biomedicine industry in the country.
The amendment to the Act for the Development of Biotech and New Pharmaceuticals Industry, which cleared its third reading in the Legislature, extends the law until the end of 2031.
In addition, the law is expanded to cover emerging fields such as regenerative medicine, digital health, precision medicine, and will also include contract development and manufacturing organizations (CDMO) from 2022.
According to the amendment, new tax reductions will be provided with the aim of further promoting the development of emerging biotechnology and pharmaceutical products in Taiwan.
For example, biopharmaceutical companies that invest over NT$10 million (US$357,142.85) and up to NT$1 billion a year in purchasing new equipment or systems can enjoy a 5-percent corporate income tax reduction for a year or a 3-percent tax reduction for three consecutive years.
In addition, an individual investor who invests more than NT$1 million in cash in a biopharmaceutical company for a year and has been a registered shareholder of that company for over three years can enjoy a reduction in his or her income tax payable for up to 50 percent of the total investment.
Under the amendment, a biopharmaceutical company can enjoy a reduction in its corporate income tax payable for up to 25 percent of total funds invested in R&amp;amp;D and personal training for a period of five years starting 2022.
Currently, a company can enjoy a tax reduction in corporate income tax payable for up to 35 percent of its total investment.
According to the Cabinet, which proposed the amendment, the change reflects the fact that corporate income tax in Taiwan was reduced from 25 percent to 20 percent in 2018.
Source: Focus Taiwan News Channel