Taiwan, S. Korea to Begin Negations over Double Taxation and Custom Cooperation Agreements in July

To facilitate bilateral investment and trade by creating better tax and investment environments, Taiwan and South Korea are starting negations on double taxation and custom cooperation agreements in July, confirmed S.F. Chang, Taiwan's Minister of Finance, after a meeting with the newly inaugurated head of the Taipei Mission in Korea in late June.

Chang explained that double taxation agreements can help signing countries avoid double taxation on their enterprises and enhance tax certainty through bilateral advance pricing agreements. They are imperative for Taiwan, he said, particularly at a time when the island is striving to join the TPP (Trans Pacific Partnership) and RCEP (Regional Comprehensive Economic Partnership).

If the agreement is signed, Chang went on, Taiwan and South Korea will be able to end double taxation on operating profits, dividends, interest incomes, earnings from royalty payments, and so forth, and offer preferential tax treatments to each other's enterprises, thereby creating a fair, incentive-based tax environment that will boost bilateral investment and trade.

According to the Ministry of Finance, Taiwan has signed double taxation agreements with 25 countries including the U.K., Sweden, Belgium, Denmark, Gambia, Vietnam, New Zealand, Germany, and Singapore. This is still not enough, Chang said, compared to China's 99, Korea's 80, Japan's 59, and Singapore's 71, so the government will step up negations on such agreements with more trade partners.

In addition, Taiwan has inked agreements to alleviate the double taxation of earnings derived from shipping and air transport operations with the European Union, Germany, Japan, Israel, Korea, Canada, the U.S., Norway, and Thailand. (SC)