1. Corporate Group Situation and Requirements

1) Main business Introduction:

The Group's main business involves office furniture and OA.

- Office Furniture: The Company owns patents related to utility model and appearance and already possesses the High and New Technology Enterprise (HNTE) qualification which can be further approved in the next three years.

- OA : With the group’s strength in IT operation technology, the group mainly engages in providing the local domestic clients OA related proposals. It also provides printers, photocopiers and other equipment, whereby ensuring to meet the clients’ high requirements about the long-term operation of the equipments and also assists in technology support and maintenance. The group also signed technology services, technology consulting and technology training related contracts, where the services are offered based on a 6% of the modern service projects.

2) OA Technology contract template 

- Did not use the Technology Market Management (TM) contract template

- The service content involves technology services, technology consulting and technology training.

- Contract validity date and fixed revenue amount not mentioned in the contract

2. Corporate Group Requirements

Based on the OA business, judge whether the group is qualified for the ATSE application and if it is, the professional team should execute the following:

- Company’s selection that is most likely to be qualified for the 2015 ATSE application.

- Improvement of the non compliance requirements

- Improvement of the company technology contract

- Obtain the COC and TM technology contract filing approval 

- Improve the accounting system 

- Check the tax filing system to see if whether it supports the declaration of VAT free technology contract

- Filing of the VAT exempted foreign technology revenue at the tax office

- Application of the 2015 ATSE qualification

- Filing of the 2015 15% CIT qualification at the tax bureau

- Post financial and tax focus points

Note : The above is for reference only

3. RTF Preliminary Project Feasibility Analysis

1) Is the group’s OA business within the ATSE scope?

- RTF preliminary conclusion : Yes!

- Reasons : Complies with the ITO or BPO technology services bracket.

- Policies : ITO relating to information technology services or facility management services or BPO relating to the provision of processes design services for internal management and operations. 

2) Eligibility points 

- Core point: 

• The off-shore outsourcing revenue should stand at least 35% of the total revenue.

• The relevant business contract should be drafted according to the TM and COC requirements.

- Basic points: 

• Company name

• Business scope

• Tax declaration items

• Staffs, 

• Issue of general invoices 

- RTF solutions:

• Based on the technology consulting , technology training services contract key points between the group and its clients, the services can provided directly to the overseas IT team or directly to the Taiwanese clients in Asia. If this is acceptable, RTF will draft the cross-border technology consulting and service contracts. The technology contents should be reflected in the contract and also due to related-party transactions, the service price should be set at a level considered to be fair and reasonable by the tax office.

- Overseas documents checklist Information

• Business license 

• Proposal template of each different projects

• Foreign revenue

• Schedule of local technical staff wages

• Technology service fee standard

3) Current projects time planning 

- Case 1: 2015 ATSE recognition of the Shanghai company

• Prerequisite: Determine whether the 2014 overseas revenue stands at least 35% of the annual revenue in 2014.

• Timing key points:

a) Feb 2015- Draft the 2015 technology contract and file the contract at the COC and TM system

b) Start of Feb 2015- Finalize the company name, business scope and other basic changes

c) Oct/Nov 2015- Submit the 2014 documents and recognize the 2015 ATSE

d) 2015- Enjoy the 15% CIT incentives and in 2016 during the CIT clearance, apply for a refund of the 2015 CIT excess payment

e) 2015- Enjoy VAT exemption and apply for VAT refund 

-Case 2: 2016 ATSE recognition of the Shanghai company

• Reason: Because in the current year, the Shanghai Company will recognize previous year’s annual data, if say the Shanghai Group does not have any offshore revenue in 2014, thus, it cannot benefit from ATSE in 2015, it can only prepare 2015 annual financial data and only recognized for ATSE in 2016.

• Timing key points:

a) Feb 2015- Draft the 2015 contract and file the contract at the COC and TM system

b) Start of Feb 2015- Finalize the company name, business scope and other basic changes

c) Oct/Nov 2015- Submit the 2015 documents and recognize the 2016 ATSE

- Case 3: 2015 ATSE recognition of the Beijing company

• Note : The group must apply for the ATSE recognition in 2015. If the group does not have any overseas revenue in 2014, the only opportunity is to apply for ATSE in Beijing.

• Reason：In Beijing, the previous year ATSE based on the previous year data will be applied and recognised in the current year. For example, the 2015 ATSE will be applied for in February 2016 based on the 2015 data.

• Key points of time :

a) Feb 2015- Draft the 2015 contract and file the contract at the COC and TM system

b) Start of Feb 2015- 

• Set up a local invested company with the Shanghai Company as the shareholder- 15-20 working days for the company establishment

• Finalize the company name, business scope and other basic changes

c) Feb 2016- Submit the 2015 documents and recognize the 2015 ATSE

d) Same as case no 2, prepare the 2016 Shanghai Co ATSE data and after getting the 2016 qualification and transfer the business to the Shanghai Co.