Taiwan Expected to Reveal Its Own CHIPS Act on Thursday

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Taiwan’s parliament is scheduled to discuss a draft of Article 10-2 of the ‘Industrial Innovation Act’ tomorrow. This could be highly impactful in Taiwan, and worldwide, as it is being characterized as Taiwan’s own CHIPS Act. Overall, this legislation looks like an understandable reaction to the recent flight of semiconductor investments out of Taiwan.

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The key attraction of the Industrial Innovation Act for domestic businesses, and what is hoped that will help steer investment back into the island, is a 25% tax break on R&D expenses for high-tech companies. There are also going to be tax breaks on the purchase of manufacturing equipment, compensated with up to an additional 5% cut in tax. Thus it could be possible to see tech businesses in Taiwan enjoying and attractive and healthy 30% tax reduction.

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