Taiwan Canada Tax Agreement Signed

Taiwan Canada Tax Agreement Signed
Photo Credit: Corbis/達志影像

What you need to know

The deal expects to avoid double taxation and promote bilateral investments in the future while protecting the rights and interests of overseas Taiwanese in Canada starting from January 1, 2017.

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On January 15, a tax agreement between Taiwan and Canada was signed, and expects to avoid double taxation and promote bilateral investments in the future while protecting the rights and interests of overseas Taiwanese in Canada. Canada is the 30th country to sign a taxation deal with Taiwan.

Economic Daily News reports the agreement will take effect starting from January 1, 2017. This is the first comprehensive taxation deal signed between Taiwan and a country in North America.

CNA reports, the Ministry of Finance points out that the agreement applies to residents of both countries. The main tax relief measures include operating profit, investment income and property exchanges. If Taiwanese businesspeople conduct business in Canada, as long as they don’t constitute a permanent establishment in the country, Canada will not tax their operating profits and it will be replaced by a 17% Taiwan income tax.

In addition, if Taiwan tax laws exclude pension income from taxable income for residents, overseas Taiwanese living in Canada should be given the same tax-free treatment.

Apple Daily reports, the Ministry of Finance also points out that Taiwan has close trade and investment relationships with Canada, which was Taiwan’s 24th largest trading partner in 2014 while Taiwan was Canada’s 12th largest trading partner. The total amount of bilateral trade from January to November 2015 was US$3.39 billion.

Translated by Olivia Yang

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