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Legal update December 2023


Court Rulings Regarding Key Matters in Shareholders' Meetings: Emphasizing the Need for Detailed Explanations in Meeting Notices

The Taiwan High Court ruled that when a company convenes a shareholders' meeting to decide on significant matters such as the election or removal of directors or supervisors, amendment of articles of incorporation, dissolution, merger, division, or any matters specified in Article 185, Paragraph 1 of the Company Act, the company must list and explain the main content of the convening reasons in the meeting notice, or place the main content on the website and specify the web address in the notice. Any violation of this requirement constitutes a breach of the law in the procedure for convening a shareholders' meeting. Shareholders have the right to request annulment of shareholders' meeting resolutions.

In a case where the meeting notice only lists the reasons for convening and fails to explain the content of proposals such as amendments to the articles, changes in the number of director seats, or increases/decreases in capital, and where the company has not placed the main content of the convening reasons on the website with the web address specified in the notice, the protection of shareholders' rights is difficult to ascertain. Filing a lawsuit to annul the resolution is deemed reasonable in such circumstances.


Source : Law Bank


Enhancing the Minimum Wage Review Mechanism to Ensure Workers' Rights: Three Readings Passed for the Minimum Wage Act


On December 12, the Legislative Yuan passed the "Minimum Wage Act" in the third reading, ensuring the rights of workers to receive a minimum wage and specifying penalties. Through the establishment of a special law, the construction of a review mechanism is improved, facilitating the government in stabilizing and clearly adjusting the minimum wage. Before the implementation of the announced minimum wage, the previously approved basic wage amount will continue to apply. The initially set minimum wage should not be lower than the original basic wage.

The Ministry of Labor clarified that according to the Labor Standards Act, wages agreed upon by employers and employees must not be lower than the basic wage. The current determination of the basic wage is made by the Basic Wage Review Committee, established under the Basic Wage Review Regulations. As these regulations are not clearly defined, the proposed legislation suggests establishing a Minimum Wage Review Committee. This committee, comprising representatives from labor, management, government, and academia, will collaboratively plan minimum wage adjustments. To ensure workers' rights, the proposed legislation outlines ten review indicators and establishes a comprehensive decision and approval process for determining the minimum wage.

Additionally, the proposed legislation specifies that wages agreed upon by employers and employees must not be lower than the minimum wage. Violators may face fines up to NT$1 million, with local authorities having the discretion to increase fines to NT$1.5 million based on factors such as business scale, violations, or severity. Violators' names may also be disclosed.


The Legislative Yuan passed an amendment to Article 17 of the Income Tax Act on the 19th.

This amendment changes the deduction for housing rent expenses from a specific deduction to a special one, raising the deduction amount from NT$120,000 to NT$180,000. In an effort to promote childbirth, the amendment also extends the age range for the special deduction for preschool-aged children. These changes will take effect on January 1, 2024. To assist those without their own housing, the amendment transforms the existing deduction for housing rent expenses into a special deduction, increasing the amount to NT$180,000 to ease the financial burden on renters. However, there are exclusions; if the comprehensive income tax rate for the tax year exceeds 20%, the special deduction won't apply to ensure efficient use of government resources.

Moreover, to counter the declining birthrate, the amendment broadens the age eligibility for the special deduction for preschool-aged children. The age limit is raised from five to six years old, and the deduction amounts to NT$150,000 annually for the first child and NT$225,000 for each subsequent child. The provision excluding wealthier households is removed, providing moderate relief to all families with children.


Source : Lawbank Taiwan


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