TAIWAN Law and Practice Contributed by: Jaclyn Tsai, Aaron Chen, Teresa Huang and Jaime Cheng, Lee, Tsai & Partners
1. Digital Economy 1.1 Key Challenges Multiple Regulations
Challenges of Adjusting Existing Regulations for Digital Goods and Services With the development of the digital economy, legal challenges have begun to emerge. Notable examples include: • Personal data and privacy protection: The col - lection, processing and use of users’ specific data by digital service providers or platforms must comply with personal data rights and privacy protection. • Fraud: Beyond common issues such as false advertising, the rise of artificial intelligence (AI) and virtual assets has led to an increase in fraudulent activities utilising digital meth - ods. In response, the Legislative Yuan passed four major anti-fraud laws, ie, the Fraud Crime Hazard Prevention Act, amendments to the Code of Criminal Procedure, the Communica - tion Security and Surveillance Act, and the Money Laundering Control Act. • Regulatory adjustments for emerging tech- nologies: Innovative business models and diverse digital goods or services often fall outside the scope of existing laws. Whether and how to regulate them are key challenges. • Market order in the digital economy: The digital economy’s development often leads to market concentration, raising concerns about competitive market dynamics. In the context of competition law, market definition and assessing market power bring new chal - lenges to agencies. 1.2 Digital Economy Taxation Overview Taiwan has not yet introduced a unified tax act specifically addressing digital goods and servic - es sold through online platforms. However, the current income tax and business tax framework applicable to traditional goods and services extends to digital transactions, with the Ministry
Taiwan currently lacks a unified framework spe - cifically regulating the digital market or digital services. While the Executive Yuan of Taiwan launched the “Digital Nation and Innovative Economic Development Plan (DIGI+)” to promote digital economic development, Taiwan currently has yet to promulgate a single law governing the digital market or digital services. Regulations related to the digital economy may cross multiple laws covering multiple aspects. For example: • Data sharing: Personal data collected, pro - cessed and transmitted in digital markets is subject to the Personal Data Protection Act (PDPA), the Guidelines for the Management of Personal Data File Security in the Digital Economy Industry, etc. • Telecommunications: Key regulations include the Telecommunications Management Act (“TM Act”), the Unmanned Vehicle Technology Innovative Experimentation Act and the Cyber Security Management Act (“CSM Act”). • Financial sector: The Financial Technology Development and Innovative Experimentation Act allows businesses to conduct innovative experiments under exemption from certain regulations. In addition, to address money laundering and fraudulent acts, the Taiwan government amended various laws. Please see ‘Challenges of adjusting existing regula - tions for digital goods and services’ below for more details. • Competition law: Taiwan’s Fair Trade Act gov - erns restrictive or unfair competition behav - iours in the digital markets.
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