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Taiwan, Japan to sign tax accord: Japanese newspaper

Taiwan, Japan to sign tax accord: Japanese newspaper

Tokyo, Nov. 19 (CNA) Taiwan and Japan are set to sign a memorandum of understanding (MOU) on double taxation avoidance later this month in Tokyo, with an aim to promote personnel exchanges and bilateral investment, Japan's leading financial newspaper, the Nihon Keizai Shimbun (Nikkei), reported. Due to the absence of formal diplomatic relations between Taiwan and Japan, the tax treaty will be signed by the respective agencies authorized by the two governments to handle bilateral exchanges, according to the report.

The MOU is set to be established during the 40th Taiwan-Japan Trade and Economic Meeting scheduled to be held Nov. 25-26 in Tokyo, the report said. Once the tax agreement is signed, the subsidiaries of enterprises from the two countries can enjoy tax exemption for dividend distribution in the other country, while employees from the two countries can avoid double taxation when working in each other's country, it reported.

Taiwan has established tax treaties with 29 countries, including the United Kingdom and India. It also signed a tax agreement with mainland China in August.

Taiwan hopes that the establishment of the tax treaty with Japan will help facilitate economic cooperation between the two countries and help with the signing of a Taiwan-Japan free trade agreement.

According to official data, Japan invested US$550 million in Taiwan in 2014, up 34 percent from 2013. Japanese investment in Taiwan hit a record high of US$1.59 billion in 2006 but has been in decline since then due to falling imports and exports in the manufacturing sector.

As Taiwan's information technology industry is facing fierce competition from mainland China and South Korea, the establishment of the tax treaty with Japan will help it to attract investment from Japan's top-end industries. Taiwan's investment in Japan reached US$680 million in 2014, four times the figure for the previous year, according to data.

Since President Ma Ying-jeou took office in 2008, he has been promoting improved relations with China, while attaching great importance to promoting economic ties with Japan.

In 2011, Taiwan and Japan signed an investment protection accord and an open-skies agreement. (By Yang Ming-chu and Evelyn Kao)

Updated : 2021-09-19 06:39 GMT+08:00