SIDA to Offer Tax Incentives to Team Owners
BANG! All the sports teams in Taiwan rejoiced as the deputy speaker of the parliament struck his gavel against the wooden sound block. Oh yes, the colliding sound of two pieces of wood has never been sound so good.
On December 7, the Taiwanese parliament passed the third and final reading of the long-awaited Sports Industry Development Act (SIDA).
Under the amended SIDA article 26-2, business entities can receive tax write-offs up to 150% for every dollar they donate to the sports industry in Taiwan. The act expects to provide much-needed tax incentives to sports team owners.
Let’s use a CPBL team as an example. Should Fubon Financial “donate” 10 million USD to Fubon Guardians, then Fubon Financial will be eligible to deduct $15 million against their income in that fiscal year.
CPBL Teams Are Not Subject To $330K Limit
SIDA article 26-2 stated a 330,000 USD limit in tax credit per business entity. And if both the donor and sports team are connected, then they can only claim 100% in tax credit.
However, for a selective group of sports approved by the Ministry of Education, they are not subject to the $330,000 limitations. Those business entities can claim the full 150% in tax credit regardless of the relation between the donor and sports team.
While the regulation does not specify which group of sports, but one can assume it is most likely to be Taiwan’s professional baseball and professional basketball leagues.
Cross-Parties Negotiations: 250%? 200%? 150%?
The amendment of SIDA article 26-2 was at one stage put on due to the difference between the lawmakers and the Ministry of Finance.
Some lawmakers, including the CPBL commissioner Tsai Chi-Chang, proposed 250% in tax credit, some wanted 200%, and the Ministry preferred it to be 150%.
After months of cross-parties negotiations, the Taiwanese legislators finally settled on 150% in tax credit.
“Let’s get article 26-2 across the line first. We can always adjust it and make it better in the future,” said the CPBL commissioner Tsai Chi-Chang, who is also the deputy speaker of the parliament.
“The amendment of SIDA today is not only an important milestone for the cultivation of athletes, but it is also the key to the development of our sports industry,” said legislator Chang Liao Wan-Chien.
Commissioner Hints 6th CPBL Team in 2022?
According to the CPBL commissioner Tsai Chi-Chang, who is also one of the legislators pushing for the amendment of SIDA, told the media that the Sports Industry Development Act would accelerate the CPBL expansion process.
“It is quite possible to see the sixth CPBL expansion team in 2022,” said commissioner Tsai Chi-Chang.
As of today, Chunghwa Telecom, Taiwan’s largest telecom company, has expressed interest in becoming the CPBL expansion team.
On December 2, Taiwan’s Minister of Transportation and Communications, Wang Kwo-Tsai, told the media that they fully support Chunghwa Telecom becoming the sixth CPBL team. The Ministry of Transportation and Communications have a 35% stake in Chunghwa Telecom.
It is also worth noting, as part of the amendment of SIDA, the legislators also managed to abolish article 7.
Under the old regulation, governments at all levels and state-owned businesses can invest in the sports industry, but they are not permitted to exceed 50% in stake.
With the abolishment of SIDA article 7, the government and state-owned businesses can now freely invest in Taiwan’s sports industry.
Chunghwa Telecom's general manager sighting at the Taiwan Series! Chunghwa Telecom have been named as a potential #CPBL expansion team candidate. 👀 pic.twitter.com/kPRcbKzRgo
— CPBL STATS ♥️ #95 (@GOCPBL) November 27, 2021