The Small and Medium Enterprises Administration of the Ministry of Economic Affairs has promoted the draft amendment to the "Small, Medium and Micro Enterprises Development Ordinance", which will be renamed the "Ordinance on the Transformation, Upgrading and Development of Small, Medium and Micro Enterprises" (the Ordinance on the Transformation, Upgrading and Development of Small, Medium and Micro Enterprises) (the Ordinance on the Transformation, Upgrading and Development of Small, Medium and Micro Enterprises). The tax incentives are better than those under the Industrial Innovation Ordinance. Among them, the deduction threshold for equipment such as smart machinery, digital and net-zero transformation has been significantly reduced to NT$250,000, which is NT$1 million higher than the threshold of the Industrial Innovation Ordinance, and the R&D investment rate has also been increased to 20%.
The Ministry of Economic Affairs today proposed a "Plan to Support and Strengthen Micro, Small and Medium Enterprises" to comprehensively upgrade and legalize the original "Diversified Revitalization Plan for Small, Medium and Micro Enterprises" and to cooperate with the draft amendment to the "Small, Medium and Micro Enterprises Development Ordinance" (renamed "Micro, Small and Medium Enterprises Transformation, Upgrading and Development Ordinance"). It is expected that in the next eight years, the government will invest an additional 100 billion yuan in the budget into the "Micro, Small and Medium Enterprises Transformation and Upgrading Development Fund" to establish a long-term, stable and institutional support system.
The biggest highlight of this plan and the revised law is to expand counseling and inclusive resources to 1.716 million small, medium and micro enterprises across the country, to include 1.029 million micro-stores such as sole proprietorships and partnerships, which account for up to 60%, to include counseling assistance, and to promote the improvement of the market environment of 353 business districts and 1,030 public places.
This amendment to the law significantly relaxes tax incentives for equipment investment and R&D innovation. Among them, the deduction threshold for smart machinery, artificial intelligence, digital and net-zero transformation equipment has been significantly lowered to NT$250,000 compared to the NT$1 million threshold of the Industrial Innovation Ordinance. For the first time, "digital management systems" and "outsourced R&D expenditures" required by the service industry have been included in the applicable scope, and the R&D deduction rate for that year has also been increased to 20%.
Deputy Minister of the Ministry of Economic Affairs Ho Jin-Cang said today that it is initially estimated that after the amendment to the law, about 4,000 companies will benefit every year, including applying for R&D and equipment investment deductions, as well as tax benefits such as additional employees and employee salary increases, driving investment of about 50 billion yuan.
He Jincang continued to point out that this revision of the law will increase the deduction rate for R&D investment by small, medium and micro enterprises by 5 percentage points. The deduction rate for the current year will be increased from 15% to 20%. If you choose to deduct it over three years, the deduction rate will be increased from 10% to 15%, which is better than the current industrial innovation regulations.
The Ministry of Economic Affairs has announced amendments to the "Small and Medium Enterprises Development Regulations" starting today. The notice period will be until September 24. During this period, public hearings will be held to collect opinions from all walks of life. It is expected to be sent to the Legislative Yuan for review in early October.
