Sales of ADSs by you are regarded as transactions relating to property located outside the Republic of China and thus any  gains derived therefrom are currently not subject to Republic of China income tax.  Distributions of statutory preemptive rights for common shares in compliance with Republic of China law are not subject to  any Republic of China tax. Proceeds derived from sales of statutory preemptive rights evidenced by securities are exempted from  income tax but are subject to securities transaction tax at the rate of 0.3% of the gross amount received. Proceeds derived from sales  of statutory preemptive rights which are not evidenced by securities are subject to capital gains tax at the rate of:  Subject to compliance with Republic of China law, we, at our sole discretion, can determine whether statutory preemptive  rights shall be evidenced by issuance of securities.  A securities transaction tax, at the rate of 0.3% of the gross amount received, payable by the seller will be withheld upon a  sale of common shares in Taiwan. Transfers of ADSs are not subject to Republic of China securities transaction tax. According to a  letter issued by the Ministry of Finance of the Republic of China in 1996, withdrawal of common shares from the deposit facility will  not be subject to Republic of China securities transaction tax. Republic of China estate tax is payable on any property within Taiwan of a deceased person who is a nonresident individual,  and Republic of China gift tax is payable on any property within Taiwan donated by any such person. Under Republic of China estate  and gift tax laws, common shares issued by Taiwan companies are deemed located in Taiwan regardless of the location of the owner.  It is not clear whether the ADSs will be regarded as property located in Taiwan under Republic of China estate and gift tax laws.  Starting from January 21, 2009, the estate tax and gift tax rates were reduced to 10%.  The Republic of China does not have an income tax treaty with the United States. On the other hand, the Republic of China  has income tax treaties with Indonesia, Israel, Singapore, South Africa, Australia, Vietnam, New Zealand, Malaysia, Macedonia,  Swaziland, the Netherlands, United Kingdom, Gambia, Senegal, Sweden, Belgium and Denmark, Paraguay, Hungary, France, India,  Slovakia, and Switzerland, which may limit the rate of Republic of China withholding tax on dividends paid with respect to common  shares in Taiwan companies. It is unclear whether if you hold ADSs, you will be considered to hold common shares for the purposes  of these treaties. Accordingly, if you may otherwise be entitled to the benefits of the relevant income tax treaty, you should consult  your tax advisors concerning your eligibility for the benefits with respect to the ADSs.  Under the Republic of China Income Tax Laws, a 10% retained earnings tax will be imposed on a company for its after-tax  earnings generated after January 1, 1998 which are not distributed in the following year. The retained earnings tax so paid will further  reduce the retained earnings available for future distribution. When the company declares dividends out of those retained earnings,  up to a maximum amount of 10% of the declared dividends may be credited against the 20% withholding tax imposed on the non- resident holders of its shares.  116 P AR T I Securities Transaction Tax Preemptive Rights Estate Taxation and Gift Tax Tax Treaty Retained Earnings Tax ●  20% of the gains realized if you are a natural person; or  ●  20% of the gains realized if you are an entity that is not a natural person. 