Taiwan’s general policies toward Income Tax Agreements are to eliminate double taxation, prevent tax evasion, improve bilateral investment activities and enhance culture and academic co-operation.
The Income Tax Agreements that Taiwan has entered into follow the OECD model and the UN model, and take into consideration matters relating to the political and fiscal status, economics, and trade of the mutual parties.
There are 35 comprehensive Income Tax Agreements and 13 international Transportation Income Tax Agreements which have been signed and brought into force.
| Countries | Date of Signature | Effective Date |
|---|---|---|
| Singapore* | 1981/12/30 | 1982/01/01 |
| Indonesia* | 1995/03/01 | 1996/01/12 |
| South Africa | 1994/02/14 | 1996/09/12 |
| Australia* | 1996/05/29 | 1996/10/11 |
| New Zealand* | 1996/11/11 | 1997/12/05 |
| Vietnam* | 1998/04/06 | 1998/05/06 |
| Gambia | 1998/07/22 | 1998/11/04 |
| Eswatini | 1998/09/07 | 1999/02/09 |
| Malaysia* | 1996/07/23 | 1999/02/26 |
| North Macedonia | 1999/06/09 | 1999/06/09 |
| The Netherlands | 2001/02/27 | 2001/05/16 |
| UK | 2002/04/08 2021/08/11 & 2021/08/19(Amending Protocol) |
2002/12/23 2021/12/23 |
| Senegal | 2000/01/20 | 2004/09/10 |
| Sweden | 2001/06/08 | 2004/11/24 |
| Belgium | 2004/10/13 | 2005/12/14 |
| Denmark | 2005/08/30 | 2005/12/23 |
| Israel | 2009/12/18 2009/12/24 |
2009/12/24 |
| Paraguay | 1994/04/28 2008/03/06(supplementary agreement) |
2010/6/3 |
| Hungary | 2010/04/19 | 2010/12/29 |
| France | 2010/12/24 | 2011/01/01 |
| India* | 2011/07/12 | 2011/08/12 |
| Slovakia | 2011/08/10 | 2011/09/24 |
| Switzerland | 2007/10/08 2011/07/14(Exchange of Letters) |
2011/12/13 |
| German | 2011/12/19 2011/12/28 |
2012/11/07 |
| Thailand* | 1999/07/09 2012/12/03(protocol) |
2012/12/19 |
| Kiribati | 2014/05/13 | 2014/06/23 |
| Luxembourg | 2011/12/19 | 2014/07/25 |
| Austria | 2014/07/12 | 2014/12/20 |
| Italy | 2015/06/01 & 2015/12/31 | 2015/12/31 |
| Japan | 2015/11/26 | 2016/6/13 |
| Canada | 2016/01/13 & 2016/01/15 | 2016/12/19 |
| Poland | 2016/10/21 | 2016/12/30 |
| Czech Republic | 2017/12/12 | 2020/05/12 |
| Saudi Arabia | 2020/12/02 | 2021/11/01 |
| Korea | 2021/11/17 | 2023/12/27 |
(*The destination countries of the "New Southbound Policy")
| Countries | S: Shipping / A: Air Transport | Date of Signature | Effective Date |
|---|---|---|---|
| Canada | A | 1995/07/10 | Same as left column |
| EU | S | 1990/08/01 | Same as left column |
| Germany | S | 1988/08/23 | Same as left column |
| Japan | S&A | 1990/09/04 | Same as left column |
| Korea | S&A | 1991/12/10 | Same as left column |
| Luxembourg | A | 1985/03/04 | Same as left column |
| Macau(before 2018/1/1) Macau(beginning on or after 2018/1/1) |
A | 1998/12/18 2015/12/10 |
1999/02/26 2017/12/29 |
| The Netherlands | S | 1989/06/07 | 1988/01/01 |
| A | 1984/05/28 | 1983/04/01 | |
| Norway | S | 1991/06/07 | Same as left column |
| Sweden | S | 1990/09/05 | Same as left column |
| Thailand* | A | 1984/06/30 | Same as left column |
| United States | S&A | 1988/05/31 | Same as left column |
(*The destination countries of the "New Southbound Policy")
Taiwan's withholding tax rate on dividends, and royalties payable to a non-resident are 21% and 20%, respectively. The withholding rate is 15% for interest on bonds, short-term commercial papers, securitized products, and interest derived from RP/RS transactions , and 20% for other types of interest. In addition, reduced withholding tax rates ranging from 3%-15% are provided by Income Tax Agreements with respect to dividends, interest, and royalties as follows:
| Income Item Country |
Dividends | Interest | Royalties |
|---|---|---|---|
| Non-treaty Countries | 21 | 15,20 | 20 |
| Australia | 10,15 | 10 | 12.5 |
| Austria | 10 | 10 | 10 |
| Belgium | 10 | 10 | 10 |
| Canada | 10,15 | 10 | 10 |
| Czech Republic | 10 | 10 | 5*,10 |
| Denmark | 10 | 10 | 10 |
| France | 10 | 10 | 10 |
| Gambia | 10 | 10 | 10 |
| Germany | 10,15 | 10,15 | 10 |
| Hungary | 10 | 10 | 10 |
| India | 12.5 | 10 | 10 |
| Indonesia | 10 | 10 | 10 |
| Israel | 10 | 7,10 | 10 |
| Italy | 10 | 10 | 10 |
| Japan | 10 | 10 | 10 |
| Korea | 10 | 10 | 10 |
| Kiribati | 10 | 10 | 10 |
| Luxembourg | 10,15 | 10,15 | 10 |
| North Macedonia | 10 | 10 | 10 |
| Malaysia | 12.5 | 10 | 10 |
| New Zealand | 15 | 10 | 10 |
| Netherlands | 10 | 10 | 10 |
| Paraguay | 5 | 10 | 10 |
| Poland | 10 | 10 | 3**,10 |
| Saudi Arabia | 12.5 | 10 | 4***,10 |
| Senegal | 10 | 15 | 12.5 |
| Singapore | 40**** | N/A | 15 |
| Slovakia | 10 | 10 | 5,10 |
| South Africa | 5,15 | 10 | 10 |
| Eswatini | 10 | 10 | 10 |
| Sweden | 10 | 10 | 10 |
| Switzerland | 10,15 | 10 | 10 |
| Thailand | 5,10 | 10,15 | 10 |
| UK | 10,15 | 10 | 10 |
| Vietnam | 15 | 10 | 15 |
Source:International Fiscal Affairs, Ministry of Finance
* 5 per cent of the gross amount of the royalties paid as a consideration for the use of, or the right to use, industrial, commercial, or scientific equipment.
** 3 per cent of the gross amount of the royalties paid as a consideration for the use of, or the right to use, industrial, commercial, or scientific equipment.
*** 4 per cent of the gross amount of the royalties paid as a consideration for the use of, or the right to use, industrial, commercial, or scientific equipment.
**** The tax shall not exceed an amount which together with the corporate income tax payable on the profits of the company paying the dividends constitutes 40% of that part of the taxable income out of which the dividends are declared.
According to "Regulations Governing Tax Exemptions under the Cross-Strait Sea Transport Agreement and Supplementary Agreement on Cross-Strait Air Transport" promulgated by the Ministry of Finance on July 1st, 2010, it provides that the revenues derived from transportation of the passengers or cargos from Taiwan Area to Mainland China Area by the ship and air transportation industries in the Mainland China Area (the Mainland China's sea and air transportation industries) is subject to zero-rated business taxe and can be exempted from income taxes. The tax treatment above will retroactively take effect on the following dates:
The business agents or a fixed place of business of the Mainland China's sea and air transportation industries engaging in selling goods or services in Taiwan should register with the tax authorities, issue supporting documents, establish and keep books of account, calculate business tax payable and report sales revenue, or overpaid tax. During filing of business tax returns, the revenues so derived from transporting passengers or cargos from Taiwan Area to Mainland China Area is required to be listed in a prescribed form.
The Mainland China's sea and air transportation industries which earn income frim Taiwan Area are subject to Taiwan profit-seeking-enterprise income tax. The Mainland China's sea and air transportation industries with revenues generated from transporting passengers and cargos from Taiwan Area to the Mainland China Area should obtain the income tax exemption approval from the tax authorities by submitting an application along with relevant support document, permission documentation from the competent authorities and other relevant document attached. However, when the entity has a fixed place of business or business agents in Taiwan, the tax collection authority will assess the exempted income through the annual income tax return filed by the fixed place of business or the tax reported by the business agent.
The income generated from transporting passengers and cargo from Taiwan Area to the Mainland China Area by the Mainland China's sea and air transportation industries should be exempt from profit-seeking-enterprise income tax:
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