Double Tax Agreement between Taiwan and Other Countries: What You Need to Know
If you are a business owner or an individual who has dealings with Taiwan, it is important to be familiar with double tax agreements (DTAs). DTAs are bilateral agreements between two countries that aim to eliminate the possibility of double taxation on income or property. Taiwan has signed DTAs with many countries, including the United States, the United Kingdom, Australia, Canada, and Japan, among others.
What is double taxation?
Double taxation occurs when the same income or property is taxed twice, by both the country where it was earned or located and the country where the taxpayer resides. This can result in a higher tax burden that is unfair and inhibitive to international trade and investment. DTAs provide a mechanism to avoid double taxation and provide a level of certainty to taxpayers.
What are the benefits of DTAs between Taiwan and other countries?
DTAs have several benefits, including:
1. Elimination of double taxation: DTAs provide a mechanism for the elimination of double taxation by allowing taxpayers to claim a credit for taxes paid in the other country.
2. Reducing tax evasion: DTAs include provisions for the exchange of information between the tax authorities of the two countries. This helps to reduce tax evasion by making it more difficult for taxpayers to hide income or assets offshore.
3. Promoting international trade and investment: DTAs provide a level of certainty and predictability for businesses and investors. This can help to promote international trade and investment by reducing the tax burden on cross-border transactions.
4. Avoidance of double non-taxation: DTAs also include provisions to prevent double non-taxation, which can occur when income or assets are not taxable in either country. This can happen when one country does not tax foreign income or when both countries exempt the same income.
What are the terms of the double tax agreement between Taiwan and other countries?
The terms of DTAs vary depending on the country involved. However, most DTAs include provisions for the elimination of double taxation on income from various sources, including dividends, interest, royalties, and capital gains. They also include rules for determining residency and for the allocation of taxing rights between the two countries.
Where can I find information on double tax agreements between Taiwan and other countries?
The Ministry of Finance of Taiwan provides information on its website about the DTAs signed with other countries. The website includes the full text of the agreements, as well as information on their status and implementation.
In conclusion, DTAs are an essential tool for promoting international trade and investment while avoiding the possibility of double taxation. As a business owner or individual with dealings with Taiwan, it is important to be aware of the DTAs between Taiwan and other countries and to consult with tax professionals or legal advisors to ensure compliance with their provisions.