Arrangement Between the Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income


This electronic version of the Canada-Taiwan Income Tax Arrangement signed on January 15, 2016 is provided for convenience of reference only and has no official sanction.


The Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada,

DESIRING to conclude an Arrangement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income,

HAVE reached the following Arrangement:

This Arrangement will apply to persons who are residents of one or both of the territories, as defined in this Arrangement.

(a) in the territory in which the income tax law administered by the Canada Revenue Agency is applied, the taxes imposed under the Income Tax Act; and

(b) in the territory in which the taxation law administered by the Taxation Administration, Ministry of Finance, Taiwan is applied:

(i) the profit seeking enterprise income tax;

(ii) the individual consolidated income tax; and

(iii) the income basic tax.

(a) the term “territory” refers to the geographic area over which the Canada Revenue Agency exercises jurisdiction, or the geographic area over which the Taxation Administration, Ministry of Finance, Taiwan exercises jurisdiction. As the context requires, “other territory” and “territories” will be construed accordingly;

(b) the term “person” includes an individual, a trust, a company and any other body of persons;

(c) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

(d) the term “enterprise” applies to the carrying on of any business;

(e) the terms “enterprise of a territory” and “enterprise of the other territory” mean respectively an enterprise carried on by a resident of a territory and an enterprise carried on by a resident of the other territory;

(f) the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a territory, except when such transport is principally between places in the other territory;

(g) the term “competent authority” means:

(i) in the case of the territory in which the income tax law administered by the Canada Revenue Agency is applied, the Minister of National Revenue or the Minister’s authorized representative; and

(ii) in the case of the territory in which the taxation law administered by the Taxation Administration, Ministry of Finance, Taiwan is applied, the Minister or the Minister’s authorized representative.

(a) any person who, under the laws of that territory, is liable to tax therein by reason of the person’s domicile, residence, place of incorporation, place of management or any other criterion of a similar nature; and

(b) the government of that territory or of a subdivision or local authority thereof or any agency or instrumentality of any such government or local authority.

(a) the individual will be deemed to be a resident only of the territory in which the individual has a permanent home available and if the individual has a permanent home available in both territories, the individual will be deemed to be a resident only of the territory with which the individual’s personal and economic relations are closer (centre of vital interests);

(b) if the territory in which the individual’s centre of vital interests is situated cannot be determined, or if there is not a permanent home available to the individual in either territory, the individual will be deemed to be a resident only of the territory in which the individual has an habitual abode;

(c) if the individual has an habitual abode in both territories or in neither of them, the competent authorities of the territories will settle the question by mutual agreement.

(a) a place of management;

(b) a branch;

(c) an office;

(d) a factory;

(e) a workshop; and

(f) a mine, an oil or gas well, a quarry or any other place relating to the exploration for or the exploitation of natural resources.

(a) it carries on supervisory activities within the other territory for more than six months in connection with a building site or construction or installation project which is being undertaken in the other territory;

(b) it furnishes services, including consultancy services, through employees or other personnel or persons engaged by the enterprise for such purpose, but only where activities of that nature continue within that other territory, for the same or a connected project, for a period or periods aggregating more than 183 days within any twelve month period.

(a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise;

(b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery;

(c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise;

(d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise;

(e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character;

(f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character.

(a) profits from the rental on a full (time or voyage) basis or a bareboat basis of ships or aircraft; and

(b) profits from the use, maintenance or rental of containers (including trailers and related equipment for the transport of containers) used for the transport of goods or merchandise,

(a) an enterprise of a territory participates directly or indirectly in the management, control or capital of an enterprise of the other territory; or

(b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a territory and an enterprise of the other territory,

(a) 10 per cent of the gross amount of the dividends if the beneficial owner is a company that holds directly or indirectly at least 20 per cent of the capital of the company paying the dividends; and

(b) 15 per cent of the gross amount of the dividends, in all other cases.

(a) interest arising in the territory in which the taxation laws administered by the Taxation Administration, Ministry of Finance, Taiwan are applied and paid to a resident of the territory in which the income tax law administered by the Canada Revenue Agency is applied will be taxable only in the latter territory if it is paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by Export Development Canada;

(b) interest arising in the territory in which the income tax law administered by the Canada Revenue Agency is applied and paid to a resident of the territory in which the taxation laws administered by the Taxation Administration, Ministry of Finance, Taiwan are applied will be taxable only in the latter territory if it is paid in respect of a loan made, guaranteed or insured, or a credit extended, guaranteed or insured by the instrumentalities which aim at promoting export and are approved by the Taxation Administration, Ministry of Finance, Taiwan; and

(c) interest arising in a territory and paid to:

(i) the authority administering the other territory or a subdivision or local authority thereof,

(ii) the central bank of the other territory, or

(iii) an entity owned by the authority administering the other territory and mutually agreed upon by the competent authorities of the territories;

will be taxable only in that other territory.
Capital Gains
Independent Personal Services
Dependent Personal Services
Pensions and Annuities
Government Service

(i) is a citizen or a national of that territory; or

(ii) did not become a resident of that territory solely for the purpose of rendering the services.

(a) subject to the existing provisions of the law of the territory in which the income tax law administered by the Canada Revenue Agency is applied regarding the deduction from tax payable in that territory of tax paid outside that territory and to any subsequent modification of those provisions - which will not affect the general principle hereof – and unless a greater deduction or relief is provided under the laws of that territory, tax payable in the other territory on profits, income or gains arising in that other territory will be deducted from any tax payable in the first-mentioned territory in respect of such profits, income or gains; and

(b) where, in accordance with any provision of the Arrangement, income derived by a resident of the territory in which the income tax law administered by the Canada Revenue Agency is applied is exempt from tax in that territory, the government of that territory may nevertheless, in calculating the amount of tax on other income, take into account the exempted income.

where a resident of the territory in which the taxation laws administered by the Taxation Administration, Ministry of Finance, Taiwan are applied derives income from the other territory (but excluding, in case of a dividend, tax paid in respect of the profits out of which the dividend is paid), the amount of tax on that income paid in the other territory and in accordance with the provisions of this Arrangement, will be credited against the tax levied in the first-mentioned territory imposed on that resident. The amount of credit, however, will not exceed the amount of the tax in the first-mentioned territory on that income computed in accordance with its taxation laws and regulations.

(a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other territory;

(b) to supply information that is not obtainable under the laws or in the normal course of the administration of that or of the other territory; or

(c) to supply information that would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).

(a) in the territory in which the income tax law administered by the Canada Revenue Agency is applied:

(i) in respect of tax withheld at the source on amounts paid or credited to non-residents on or after the first day of January in the calendar year following that which includes the date of the later notification; and

(ii) in respect of other tax, for taxation years beginning on or after the first day of January in the calendar year following that which includes the date of the later notification; and

(b) in the territory in which the taxation law administered by the Taxation Administration, Ministry of Finance, Taiwan is applied:

(i) in respect of tax withheld at the source on amounts paid or payable to non-residents on or after the first day of January in the calendar year following that which includes the date of the later notification; and

(ii) in respect of other tax, for taxation years beginning on or after the first day of January in the calendar year following that which includes the date of the later notification;

(c) in respect of Section 25 for information that relates to taxation years beginning on or after the first day of January in the calendar year following that which includes the date of the later notification.

(a) in the territory in which the income tax law administered by the Canada Revenue Agency is applied:

(i) in respect of tax withheld at the source on amounts paid or credited to non-residents, after the end of that calendar year; and

(ii) in respect of other tax, for taxation years beginning after the end of that calendar year; and

(b) in the territory in which the taxation law administered by the Taxation Administration, Ministry of Finance, Taiwan is applied:

(i) in respect of tax withheld at the source on amounts paid or payable to non-residents, after the end of that calendar year; and

(ii) in respect of other tax, for taxation years beginning after the end of that calendar year.

FOR THE CANADIAN TRADE OFFICE IN TAIPEI
FOR THE TAIPEI ECONOMIC AND CULTURAL OFFICE IN CANADA

1. With reference to paragraph 1 of Section 4, the term “instrumentality” means any entity created or organized by the authority administering either territory or a subdivision thereof in order to carry out functions of a governmental nature.

2. With reference to paragraph 4 of Section 13, for greater certainty, the term “the value of which is derived” means whether such value is derived directly or indirectly.

3. With reference to paragraph 4 of Section 13, “principally” means more than 50 per cent.

4. With reference to paragraph 6 of Section 13, it is understood that the determination of the gain that accrued in a territory while an individual was a resident of that territory in respect of a property will be made by reference to the lesser of the fair market value of the property at the time that the individual ceased to be a resident of that territory or the proceeds of disposition realized at the time of the actual alienation of the property.

5. With reference to paragraph 1 of Section 14, where income derived by a resident of a territory in respect of professional services or other activities of an independent character may be taxed in the other territory, there will be allowed as deductions expenses which are incurred for the purposes of performing such services in determining taxable income.

6. With reference to Section 25, it is understood that its provisions do not require the territories to exchange information on an automatic or a spontaneous basis.

FOR THE CANADIAN TRADE OFFICE IN TAIPEI
FOR THE TAIPEI ECONOMIC AND CULTURAL OFFICE IN CANADA
Report a problem or mistake on this page
Please select all that apply:

Thank you for your help!

You will not receive a reply. For enquiries, contact us.

Date modified: