The Executive Yuan recently approved a draft revision of the Statute for the
Establishment and Administration of Export Processing Zones（EPZs）designed to
speed up EPZ development. Once the revision is passed by the Executive Yuan, it
will resolve the problem of disputes over the double taxation of non-bonded
goods shipped from EPZs to tax zones. It will also diversify EPZ development
models by providing for cooperation between EPZs and government enterprises.
The EPZ Administration notes that while in the past land for EPZs was procured
through requisition, in the future, in consideration of the government’s
financial burden and the needs of industrial development, government enterprises
will be allowed to provide land for development by zone administrations. This
will give government enterprises a new source of rental income while reducing
land requisition spending by zone administrations.
The revision will also change wording in the Statute from “Products of business
entity within the export processing zone”to “Bonded products of business entity
within the export processing zone”to avoid disputes over the double taxation of
non-bonded goods. The EPZ Administration explains that in the past all products
and materials within the zones were bonded goods, and all had to be exported
without entering tax zones. Now, tax-paid non-bonded products and materials that
are imported or procured from tax zones in Taiwan are also allowed into the EPZs;
under the original rules, when such goods were shipped from EPZs to tax zones
they were subject to double taxation. This issue is currently being handled by
administrative interpretation, but when the revision is enacted the problem will
cease to exist.
Another impending improvement for Taiwan’s EPZs is the planned establishment
within the zones of bilingual schools, or experimental elementary and high
schools with bilingual departments. By solving the problem of education for the
children of EPZ employees, this will attract outstanding foreign professionals
to come and work in Taiwan, encourage overseas Taiwanese enterprises to return
to the island, and boost foreign investment in EPZs.
