At Thursday's meeting of the Cabinet, Premier Su Tseng-chang said that Taiwan has successfully addressed European Union concerns and no longer appears on the EU's latest list of non-cooperative tax jurisdictions. The premier noted that not only does removal from the list boost Taiwan's international image and reputation, but even more importantly it assures that local enterprises will remain able to invest and compete in EU member states.
The EU list receives annual updates, said Premier Su, thus in setting policy Taiwan must pay careful attention and avoid adopting detrimental tax measures. In the past Taiwan offered tax advantages associated with free trade zones, which caused concern in the EU. Should Taiwan in the future consider similar tax incentives for foreign enterprises or export firms, questions of unfair taxation could again arise. Pointing to free economic pilot zones as an example, the premier said that the differences in tax calculation on operations inside versus outside such zones could cross a red line with respect to the EU's standards for fair tax competition, which would forfeit past efforts to address the issue and jeopardize Taiwan's national competitiveness.