Five Major Companies Seek Tax Breaks Under Taiwan’s CHIPS Act, With TSMC Favored

Taiwan’s CHIPS Act refers to tax incentives introduced by the Ministry of Economic Affairs and Ministry of Finance under Article 10-2 of the Statute for Industrial Innovation. The incentives apply from January 1, 2023, through December 31, 2029. Companies meeting thresholds including NT$6 billion in research and development spending and an R&D intensity of 6% may apply for a corporate income tax credit equal to 25% of R&D expenditure. The policy is central to Taiwan’s efforts to retain advanced semiconductor investment.

Applications for this year closed on May 31, with five major companies submitting filings to the Ministry of Economic Affairs. The ministry will review the applications jointly with the Ministry of Finance, and the final list still requires approval. The market expects TSMC to have a stronger chance of securing the 25% R&D investment tax credit because it continues to expand its advanced-process and research operations. Companies that also apply for incentives covering advanced equipment face a minimum investment threshold of NT$10 billion and qualify for a 5% tax credit.