A Taiwan-France treaty that abolishes double taxation between the two countries is set to take effect Jan. 1, 2011, according to the Ministry of Finance.
Under the pact, which was signed this month, investors pay taxes on business operating income only in the country where they maintain long-term bases of operation, the MOF said.
“The accord is the most important economic agreement Taiwan has signed with France in recent years,” the MOF said. “The treaty should help the nation strengthen trade ties and deepen cooperation with France and protect the rights of investors.”
In addition, the MOF said, tax rates on stock dividends will be harmonized at 10 percent as opposed to 20 percent and 25 percent in Taiwan and France, respectively.
Interest income will be taxed at 10 percent, down from 15 percent to 20 percent in Taiwan and 18 percent in France, the MOF said. Tax rates on royalty income will also be adjusted to a consistent 10 percent, down from the respective 20 percent and 33.33 percent in Taiwan and France, the MOF added.
According to the Ministry of Foreign Affairs, France is Taiwan’s fifth-largest trading partner in the European Union. The agreement should benefit major Taiwanese enterprises operating there, including Asustek Computer Inc., BenQ Corp., First International Computer Inc. and HTC Corp., the MOFA said.
Taiwan’s pact with France is the 20th income tax treaty signed by the MOF to come into force. The agreement was approved by the French parliament Dec 21. (THN)
Source: Taiwan Today
