;Small And medium-sized company have always an important pillar in Taiwan’s economy and industrial activities. Nearly 96% of the SMEs in the country work hard to make up for the title of having money in Taiwan. However, SMEs have not been taken seriously and treated fairly in the taxation system for many years. Before implementation of the two taxes, with respect to sole proprietorships , partnerships, and even company-organized enterprises, the distribution of earnings or dividend distribution is faced with double taxation of business income tax and individual agency taxation. The government has formulated the “Industry Upgrade Regulations” tax exemption incentive scheme for economic development and social development considerations at the same time. Due to the limitations of functionalities and other general conditions, companies can receive awards accountfor less than one-tenth of all companies. The implementation of the two taxes is not only the elimination of double taxation for small and medium-sized company, but also the remedial measures for companies to escape from taxation,and the improvement of investors′ willingness and an active economy by reducing tax burdens. In the 20 years since the implementation of the two taxes， some people believe that there are only a limited amount of encouraging investment. And the government’s tax revenue has also been greatly reduced. Dividend income "full set of deductions" or later "partial anti-countermeasures" makes the higher incomers more benefit, and there is the problem of fairness in the tax system. All parties have different opinions on implement the two taxes together. Some European and American countries have adjusted the two taxes together in order to increase their treasury revenues, and even returned to the old path of "independent taxation." In recent years, FDI has been unable to effectively inflow, but funds have been flowing out continuously. The establishment of the two-in-one tax deduction system obstructs foreign investment from enjoying the same tax deduction for domestic investors. However, the abolition of the two-in-one tax system has reduced incentives for encouraging long-term investment by domestic shareholders. Foreign investors really notice is the Investment dividend policy. The repeal of the two taxes does not have any impact on foreign investors. The optimize income tax and abolition of the two taxes began on January 1, 2018. What kind of changes on the tax burden for small shareholders and large shareholders? What kind of impact on company companies with the repeal of the two taxes? This is worthy of concern.
