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April 11, 2019

Taiwan issues tax ruling on corporate migration

Taiwan’s Ministry of Finance issued a ruling (the Ruling) that provides conditions under which a Taiwanese parent company would be exempt from gain recognition when a subsidiary migrates its place of company registration from one jurisdiction to another. To fall under the exemption, all of the following conditions must be met:

  1. No change in percentage of ownership and investment structure upon migration
  2. Same legal personality to be maintained in the new jurisdiction
  3. No dissolution and liquidation procedures required in the original jurisdiction
  4. Carryover of retained earnings upon migration

It should be noted that the migration may be subject to anti-avoidance provisions if it is deemed to be an unreasonable business arrangement solely for purposes of avoiding or reducing Taiwan’s tax liability.

The Ruling provides clearer guidelines under which certain subsidiary migrations are treated as a tax-free event. It is recommended that Taiwanese companies review their restructuring plans and assess feasibility of applying the Ruling criteria.

For additional information with respect to this Alert, please contact the following:

Ernst & Young (Taiwan), Taipei
  • Yishian Lin |
  • Sophie Chou |
  • Anna Tsai |
  • ChienHua Yang |
  • Jeremy Feng |
Ernst & Young LLP (Uniteds States), Asia Pacific Business Group, New York
  • Chris Finnerty |
  • Kaz Parsch |
  • Bee-Khun Yap |



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