The abolition of financial institutions listed as “Entities that Present a Low Risk of Being Used to Evade Tax”
The Ministry of Finance stated that, in accordance with the amendment to the definition of the “Governmental Entity” incorporating “Other entity that is directly or indirectly wholly held or controlled by the government at various levels,” described in Article 11 of the “Regulations Governing the Implementation of the Common Standard on Reporting and Due Diligence for Financial Institutions” (hereinafter referred to as the Regulations) on May 25 of this year (2021), financial institutions originally listed as “Entities that Present a Low Risk of Being Used to Evade Tax” fall within the amended definition after being reviewed. Thus, the list was abolished and becomes effective on December 24 of this year.
The Ministry of Finance further elaborated that, in order to enhance the efficiency of due diligence, Article 3 of the Regulations stipulates that financial institutions described in Subparagraphs 1 to 5 and listed as “Any Other Entity that Presents a Low Risk of Being Used to Evade Tax” announced by the Ministry, which is stipulated in Subparagraph 6 of the same Article, are exempted from the obligation of performing due diligence and reporting requirements set forth in the Regulations. The Ministry had previously announced that “The Labor Insurance Fund,” “Labor Retirement Fund,” “Labor Pension Fund,” and “Private School Teachers and Staff of Retirement, Compensation, Resignation and Severance Matters” were listed as “Entities that Present a Low Risk of Being Used to Evade Tax” on November 27, 2018. On May 25 of this year, the definition of “Government entity” of Article 11 of the Regulations was revised and included “Other entity that is directly or indirectly wholly held or controlled by the government at various levels.” The listed entities were reviewed and found to fulfill the renewed definition and are therefore exempted from the obligation of performing due diligence and reporting requirements set forth in the Regulations. Accordingly, the list shall be abolished.
The Ministry emphasized that, in response to the international development of tax transparency, it will constantly carry out reviews and seek advice from related competent authorities to update or amend the list of financial institutions which are “Entities that Present a Low Risk of Being Used to Evade Tax” as needed to enhance the efficiency of conducting due diligence, to follow the latest global rules, and to maintain competitiveness in taxation.
Contact person: Ms. Wen-Hsin Tseng, Secretary, Acting for Section Chief
Contact Number: (02)2322-8347
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=1bb62d3c3df94ee3a89f2de06433e812