Taiwan to legally address tax breaks for oil firm linked to carcinogen scandal

Taiwan's Premier Cho Jung-tai stated the government will "handle it according to the law" regarding tax incentives for Chung-Lien Oil, a company implicated in a food safety scandal. The firm was fined NT$165.2 million after its soybean salad oil was found to contain carcinogens exceeding legal limits.

The controversy centers on whether the government should revoke tax benefits previously granted to Chung-Lien Oil. Legislators questioned if tax deductions under the "Industrial Innovation Act" should be rescinded, given the company's violation of food safety regulations.

The Ministry of Economic Affairs clarified that Chung-Lien Oil and other implicated companies, including Tai Shan, Fu Shung, Fu Mao Oil, and Nan Chiao, had not applied for direct subsidies. However, Chung-Lien Oil and Fu Mao Oil had applied for investment tax credits related to "smart machinery" and "information and communication security" between 2022 and 2025. Fu Shung had similar applications for "research and development" and "smart machinery" in 2021-2022.

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We will handle it according to the law and make necessary arrangements.

Ministry officials explained that under the "Industrial Innovation Act," economic incentives are typically reviewed for significant violations of food safety, environmental safety, or labor safety in the preceding three years. Since the applications were completed in late May, the ministry could not retroactively revoke these specific incentives. However, the companies will be ineligible to apply for such benefits under the "Industrial Innovation Act" for the next three years.

Premier Cho emphasized that given the severe harm caused to society and the company's alleged intentional concealment and delayed reporting, administrative measures, including reviewing tax benefits, would proceed according to existing legal frameworks, in addition to judicial investigations.

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If an enterprise applies for investment tax credits, we will check if it has violated major food safety, environmental safety, or labor safety incidents in the previous three years.