Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 66

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 4
Chunk 66
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 by the end of the following year, a surtax of 5% would be
imposed on the undistributed earnings.

Effective from 2020, the Taiwan
Statute for Industrial Innovation was amended, which extends the tax incentive by 10 years until December 31, 2029, for R& D
expenditure. Under the tax incentive program, a company conducting qualifying R& D activities may select one of the following incentives:
(i) up to 15% of qualifying R& D expenses may be credited against corporate income tax payable in the current year; or (ii) up
to 10% of qualifying R& D expenses may be credited against corporate income tax payable in the year expenses incurred and carried forward
for the next 2 years. In addition, if a company uses NTD 1 million or more of its undistributed earnings to construct or purchase
buildings, software or hardware equipment, or technology for use in production or operation within 3 years from the year after such
earnings are derived, such investment amounts may be deducted from the undistributed earnings in calculation of the current year’s
undistributed earnings for assessment of surtax imposed on undistributed earnings from the year 2018.

The alternative minimum tax
(“ AMT”) imposed under the Taiwan Income Basic Tax Act is a supplemental income tax which applies if the amount of regular
income tax calculated pursuant to the Taiwan Income Tax Act and relevant laws and regulations is below the amount of basic tax prescribed
under the Taiwan Income Basic Tax Act. The taxable income for calculating AMT includes most income that is exempt from income tax
under various legislations, such as capital gains from qualified securities and future transactions. The prevailing AMT rate for business
entities is between 12% to 15%, which is determined by the Executive Yuan based on the economic circumstance.

According to the Taiwan Income
Tax Act, a withholding tax rate of 21% shall generally be applicable to dividends distributed to non-Taiwan resident enterprise/individual
investors. The withholding tax on the dividends may be reduced pursuant to a tax treaty between Taiwan and the jurisdictions in which
the non-Taiwan shareholders reside. Taiwan currently has a treaty network with 34 countries.

Regulations Pertaining to the Company’s
Products

The Company’s current
product portfolio does not require any mandatory government approval prior to commercial product launch under the existing laws and regulations
in Taiwan, Japan, the U. S., or Europe.

However, in order to