The rundown: property tax, Ta Ya's photo voltaic plans, and elevated funding from Mitsui Chemical substances

A weekly snapshot of Taiwan business news brought to you by CommonWealth and AmCham Taiwan's TOPICS

Revised property tax rates to curb speculation

The Legislative Yuan on April 9th ​​passed the third and final reading of amendments to the Income Tax Law aimed at revising property tax rates. The amended law will go into effect July 1, imposing different tax rates on property based on the amount of time it has prior to sale to curb home flipping – buying and reselling a property faster for profit.

The changes expand the definition of "short-term home flipping" which originally referred to selling a property within one year of purchase. Such sales are subject to a 45% tax on profits from these transactions. The revised definition extends the 45% tax on properties sold within two years of purchase. Properties owned between two and five years are subject to a 35% tax and 20% tax applies to properties owned for more than five years.

The changes also focus on combating pre-sale property tipping and tax evasion by treating both pre-sale property deals and those made under the guise of a company's capital transfer as real estate transactions. In addition, the new law will include legal persons as taxpayers for the first time. Such a change will help prevent nonprofits or property purchase organizations from being formed as a means of tax evasion. Foreigners and legal entities are subject to the rate of 45% for sales of properties that have been owned for two years or less and 35% for properties that have been owned for more than two years.

Observers expressed confidence that the changes will effectively keep hot money from flooding the property market and reduce the extent of short-term house flipping.

Ta Ya changes to solar energy

Ta Ya Electric Wire & Cable President Shen San-yi publicly stated on April 6 that Taiwan needed to transform its saturated cable market. Shen said the company had considered investing in offshore subsea cables, but found it too risky and costly. He said the company would therefore redirect investments into the solar industry.

The Ta Ya Group completed the construction of a 76 MW solar power plant – the first of its kind to be developed on repurposed land – in Tainan's Syuejia community in 2020. The plant went online in February of this year and is expected to produce 1.8 billion kWh of electricity over the next 20 years, significantly reducing CO2 emissions and generating sales of NT $ 9 billion.

In addition, Ta Ya completed the acquisition of Tatung's energy subsidiary in March and will provide NT $ 6 billion to build Taiwan's largest fish farm for solar panels. This year, Ta Ya is celebrating its 66th anniversary and deepening its investments in renewable energy. This includes support in installing and obtaining green energy certification for Taipower's AFC (Automatic Frequency Control) system, as well as the manufacture of enamel wires for EVs.

Mitsui Chemicals doubles production in Taiwan

Japanese chemicals maker Mitsui Chemicals announced on April 9 that it would expand its investment in Kaohsiung to 10 billion euros ($ 91.5 million). The company intends to double production of wafer protection tapes used in semiconductor manufacturing by 2023 to meet global demand.

According to the Japanese financial newspaper Nikkei, Mitsui Chemical's ICROS ™ tape is a surface protection tape used in the grinding back of silicon wafers by integrated circuit manufacturers. The company currently produces ICROS ™ at its Nagoya and Kaohsiung plants. The Kaohsiung plant was built in 2020 and is expected to double production capacity after the company increased investments there.

Mitsui Chemicals occupies 40% of the global semiconductor tape market and mainly sells its products to Taiwanese semiconductor factories. The Nikkei article stated that Japanese suppliers like Mitsubishi Chemicals and Showa Denko will also try to expand their operations in Taiwan due to the incredible growth of the semiconductor sector due to 5G and electric vehicle technology.

This edition was translated from the Chinese original by Jason Wu.