2018.7.17
Fang-Wei Lin
The Ministry of Finance issued the Tai-Cai-Shui-10700548670 Circular of July 17, 2018 to communicate that in case of consolidation of companies pursuant to Business Mergers and Acquisitions Act, the surviving or newly established company, purchasing new small passenger cars, small trucks, small passenger and cargo vehicles or motorcycles, completing new license plate registration, and writing off or exporting used vehicles or motorcycles taken over from the dissolved company after the consolidation, when applying to reduce or refund the commodity taxes on the newly purchased vehicles in accordance with Article 12-5 of the Commodity Tax Act, the periods in which the used vehicles and motorcycles are registered under the surviving or newly established company shall be calculated together with the periods registered under the dissolved company regarding the “having been registered for at least one year” requirement under such article.
To encourage the replacement of old motor vehicles with new ones to achieve energy conservation and carbon reduction, Article 12-5 of the Commodity Tax Act provides that if the owner’s small passenger vehicles, small trucks, small passenger and cargo vehicles which have left factory for over six years and motorcycles which have left the factory for at least four years with a cylinder displacement volume of less than 150 cc, registered for at least one year, are written off or exported within five years after January 8, 2016, the fixed reduced amount of the payable commodity tax imposed on the new vehicles purchased within six months before and after the write-off or export, with new license plate registration, shall be NT$50,000 for each car and NT$4,000 for each motorcycle.
In addition, the first part of Article 24 of the Business Mergers and Acquisition Act provides that the rights and obligations of a company which is dissolved as a result of a consolidation shall be generally assumed by the surviving or newly established company as a result of the consolidation. Since the surviving or newly established company generally assumes the rights and obligations of the dissolved company, this Circular was provided to indicate that when a surviving company or newly established company writes off or exports used vehicles or motorcycles taken over by from a dissolved company, and purchases new cars, the provisions for reducing commodity taxes on new vehicles shall also apply. When calculating the “having registered for at least one year” requirement under Article 12-5 of the Commodity Tax Law, the periods in which the used vehicles or motorcycles are registered under the name of the surviving company or the newly established company shall be combined together with the periods registered under the dissolved company.