Taiwan, Japan sign avoidance of double taxation pact

2015/11/30

The 40th annual economic and trade consultation meeting between Taiwan and Japan concluded Nov. 26 in Tokyo, with the two countries making significant progress on key issues of mutual interest.

Led by Lee Chia-chin, chairman of Taipei City-based Association of East Asian Relations, and his Japanese counterpart Mitsuo Ohashi of the Interchange Association, the two-day event saw the two sides conclude three important pacts.

Among these, the agreement on the avoidance of double taxation represented another significant milestone in the bilateral relationship between the two nations following the signing of an investment promotion and protection accord in October 2011.

“Taxation is among the most important aspects of an economic partnership pact. The latest development is expected to facilitate negotiations on a Taiwan-Japan economic cooperation agreement,” Lee said, calling for the resumption of bilateral discussions next year.

In response, Ohashi said Taiwan is an important partner, with Taipei and Tokyo working hard to nurture their unshakable mutual trust. “This agreement resolved a long-lasting trade issue, and will help strengthen the investment environments of both sides.”

Under the pact, the two nations agreed to cap the taxation rates for both dividends and royalties at 10 percent, as well as create a dispute settlement framework and information exchange mechanism.

The agreement is expected to boost two-way investment and trade activities by reducing the tax burdens on investors. “This will create a win-win situation by enhancing corporate competitiveness and job creation,” an official from the ROC Ministry of Finance said in Taipei City.

In addition to the pact, Taipei and Tokyo also signed two memoranda of understanding on the enforcement of competition laws and disaster prevention collaboration and exchanges.

MOF statistics show that trade between Taiwan and Japan topped US$61.59 billion last year, with Japan being Taiwan’s third largest trading partner and Taiwan being Japan’s 10th biggest partner.

As of September this year, Japan is the third leading source of foreign investment in Taiwan with US$18.58 billion, while Taiwan’s accumulated investment in the northeastern Asian country stood at US$3.75 billion.

Source: Taiwan Today (http://taiwantoday.tw/ct.asp?xItem=239486&ctNode=2194&mp=9)