Tax Treaty between Taiwan and France Effective from 1 January 2011.

Both Ministry of Finance and Ministry of Foreign Affairs announced yesterday that Taiwan had entered into the tax treaty with France, effective from 1 January this year (2011).  The treaty marks the 20th effective comprehensive income tax treaty signed by Taiwan, which helps improve Taiwanese manufacturers’ operating conditions and fair tax treatment in France and solicit France-based companies for investment in Taiwan to increase employment opportunities for nationals.

According to Ministry of Finance, the Tax Treaty between Taiwan and France consists of 30 clauses, primarily including the ownership of taxation power for business profit, mutual income tax exemption of sea and air transportation business profit, withholding rate reduced to 10% by the source country of income with respect to income from dividend, interest and royalty in the case of beneficiary being a resident of either territory, and elimination of double taxation, adoption of foreign tax sparing credit and limit no more than direct foreign tax credit.

Ministry of Foreign Affairs stated yesterday, that Taiwan and France had already signed the Tax Treaty between Taiwan and France mutually on 24 December 2010, which scheduled to be effective from 1 January 2011.  France is the fifth largest European trading partner of Taiwan.  Around 60 Taiwan-based companies, including BenQ Mobile, First International Computer, HTC, Asus and BenQ, etc., have already set up branches and divisions in France.  After the Tax Treaty takes effect, it will help improve Taiwanese manufacturers’ operating conditions and fair tax treatment in France.

Ministry of Foreign Affairs indicated that the conclusion of the Tax Treaty between Taiwan and France not only symbolized the remarkable development in economic and trading investment between Taiwan and France, but also greatly benefited the investment, trading, funding, technological exchange and tax cooperation between both countries in the near future, protect Taiwanese enterprises' tax interest and right in France, and even solicit France-based companies for investment in Taiwan.  (2011.01)
/DC