TIPS^®  Taiwan Intellectual Property Special

The Bureau of Tax indicated that, to comply with the standard set forth in the Rules, the following conditions must be fulfilled:

The licensed technology may facilitate production of new products; The licensed technology may increase the quantity of production, improve the quality or reduce the production cost; or The licensed technology may provide new manufacturing technology. provided that, such licensed technology can be directly utilized by the domestic industries or enterprises.

In conclusion, if the patent, trademark, or technology obtained by the domestic company from the foreign profit-seeking enterprise cannot comply with the aforesaid conditions, the royalty or service fees collected by the foreign company may not be exempted from income tax.