Reduced Withholding Tax

Tax treaties

Currently, Taiwan has an “Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income” with 32 countries. Taxpaying residents of Taiwan’s treaty-partner countries should not be taxed by both tax jurisdictions and may apply for approval to reduce the withholding tax on their Taiwan-based dividends, interest, royalties, capital gains, business profits, entertainers / athletes, etc.

Reduced Rates

Treaty PartnerEffective YearDividendsInterestRoyaltiesBusiness Profits
Australia199610%, 15%10%12.5%Exempt
Austria201410%10%10%Exempt
Belgium200510%10%10%Exempt
Canada201513%, 15%10%10%Exempt
Denmark200510%10%10%Exempt
France201110%10%10%Exempt
Gambia199810%10%10%Exempt
Germany201210%, 15%10%, 15%10%Exempt
Hungary201010%10%10%Exempt
India201112.5%10%10%Exempt
Indonesia199610%10%10%Exempt
Israel200910%7%, 10%10%Exempt
Italy201510%10%10%Exempt
Japan201510%10%10%Exempt
Kiribati201410%10%10%Exempt
Luxembourg201410%, 15%10%, 15%10%Exempt
Malaysia199912.5%10%10%Exempt
North Macedonia199910%10%10%Exempt
New Zealand199715%10%10%Exempt
Netherlands200110%10%10%Exempt
Paraguay20105%10%10%Exempt
Poland201510%10%3%, 10%Exempt
Senegal200410%15%12.5%Exempt
Singapore198240%Not Available15%Exempt
Slovakia201110%10%5%, 10%Exempt
South Africa19965%, 15%10%10%Exempt
Eswatini199910%10%10%Exempt
Sweden200410%10%10%Exempt
Switzerland201110%, 15%10%10%Exempt
Thailand20125%, 10%10%, 15%10%Exempt
UK200210%10%10%Exempt
Vietnam199815%10%15%Exempt

Requirements

To apply for the treaty rates,

Condition
Requirements
OrganizationNo limitation.
NationalityThe applicant must be a taxpaying resident in a country with treaty partnership respecting Taiwan.
Permanent EstablishmentIf a foreign company conducts business in Taiwan through a permanent establishment in Taiwan, the profits attributable to that establishment may be taxed by the Taiwan government.
Business in TaiwanBusiness profits, income from real estate, shipping and air transport, dividends, interest, royalties, capital gains, etc.
RoyaltiesIf business profits include royalties, the royalties should be separated and treated differently from the business profits.
IndustryNo limitation.
Technical DepthNo limitation.
EffectsNo limitation.
Related-party TransactionIf the payer and payee are related in any other way, additional to the transaction itself, the pricing and necessity will be assessed carefully.
Cost calculationNot limited.
DeadlineThe application should be submitted within 5 years after the payment takes place.

Procedures

The case will be submiited to the area’s Tax Bureau, and it generally takes 8-12 weeks to address the issues.

Assessment

Both the contract and the evidence of service provision will be required.

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