1. Introduction to Taiwan
Taiwan, Province of China, officially known as the Republic of China (ROC), is a self-governing island located in East Asia. It lies approximately 180 kilometers (110 miles) off the southeastern coast of mainland China, across the Taiwan Strait. The island has a total area of 36,193 square kilometers (13,974 square miles) and a population of approximately 23.9 million.
Taiwan has a rich and complex history, dating back to the 17th century when it was ruled by the Dutch and later the Qing dynasty of China. In 1895, Taiwan was ceded to Japan as a result of the First Sino-Japanese War. After World War II, Taiwan was returned to China, but the Chinese Civil War between the Kuomintang (KMT) and the Chinese Communist Party (CCP) resulted in the KMT retreating to Taiwan in 1949. Since then, Taiwan has been governed by the KMT and its allies, while the CCP has maintained its claim over the island.
2. Recent Significant Economic Developments
Taiwan's economy has undergone significant transformation in recent decades, evolving from an agricultural society to a modern, export-oriented economy. The country is known for its high-tech industries, particularly in the areas of semiconductors, electronics, and information technology. Taiwan is also a major producer of textiles, machinery, and petrochemicals.
One of the most recent and impactful economic developments in Taiwan is the global chip shortage that began in late 2020. Taiwan is home to the world's largest semiconductor foundry, Taiwan Semiconductor Manufacturing Company (TSMC), which produces chips for a wide range of electronic devices, including smartphones, computers, and cars. The chip shortage has led to increased demand for TSMC's products and has boosted Taiwan's exports and economic growth.
3. Latest Adjustments to Tax Legislation
Taiwan's tax legislation has undergone several changes in recent years, aimed at modernizing the tax system and improving tax administration. One of the most significant changes is the introduction of the Unified Business Tax (UBT) in 2005. The UBT replaced the previous business tax, commodity tax, and stamp tax, and is levied on businesses based on their gross revenue.
In 2021, the Taiwan government introduced a number of tax incentives to support businesses and individuals affected by the COVID-19 pandemic. These incentives included tax deferrals, tax credits, and subsidies. The government also announced plans to reduce the corporate income tax rate from 20% to 17% over the next five years.
These tax changes are expected to have a positive impact on Taiwan's economy by reducing the tax burden on businesses and individuals, and by encouraging investment and economic growth.
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