Tax treaties are also known as “Agreements for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income (ADTAs)". Taiwan’s general policies toward tax treaties are to avoid double taxation, prevent fiscal evasion, improve bilateral investment activities and enhance culture and academic co-operation.
The tax treaties that Taiwan has entered into follow the OECD model and the UN model, and take into consideration of matters relating to the political and fiscal status, economics, and trade of the mutual parties. As of 31 December 2018, there are 32 comprehensive income tax agreements signed and brought into force.
Taiwan's withholding tax rates on dividends, interest, and royalties payable to a non-resident are 21%, 20%, 20% respectively, and the withholding rate is 15% for interest on bonds, short-term commercial papers, securitized products, interest derived from the RP/RS transactions. However, reduced withholding tax rates ranging from 3-15% may be provided by treaties with respect to dividends, interest, and royalties.
Taxpayers who would like to apply for the benefits available under a tax treaty may fill in the related forms and submit them with the required documents to relevant tax authorities for approval. A good understanding of Regulations Governing Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on income and the smooth communication with tax authorities will be the key to a successful case.
The list of countries who have the effective tax treaties with Taiwan is as follows:
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