Taiwan’s current treaty network consists of 34 double tax agreements (DTA) which include UK, Canada, Netherlands, France, Japan, Singapore, Malaysia, Indonesia, India, Thailand and Vietnam, etc.
During 2021, the treaty with Saudi Arabia was added to the above network and enterprises and individuals from both countries can start benefit from the treaty commencing January 1, 2022. In addition, Taiwan signed a long-awaited treaty with Korea on November 17, 2021. It will go into effect at a pre-determined date as soon as both parties have completed their internal procedures. Most of these treaties contain a “Business Profits” provision which many multi-national companies (MNCs) should be familiar with and more importantly, during thid COVID pandemic a significant proportion of work and services are performed remotely, which could mean previously inevitable withholding tax now may become nil. We recommend, therefore, that MNCs review their transactions that may have been subject to Taiwan withholding tax again and take the opportunity to eclaim and reasses any taxes that may be reduced.
The table below summarizes the reduced withholding tax rates in accordance with various treaties:
Al Chang Managing Partner, Mazars in Taiwan - Taipei Da'an District