Canada and Taiwan have signed a double tax agreement (DTA) aimed to limit the withholding tax rates on income from dividends, interest, and royalties, and provide for the exchange of tax information.
The agreement was signed in Taipei City on 15 January 2016 to avoid the taxation of the same income twice in the two countries.
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The DTA will also promote bilateral investments in the future as well as safeguard the rights and interests of overseas Taiwanese in Canada.
The agreement will come into force on 1 January 2017 after the completion of the two countries’ respective domestic procedures.
Under the DTA, the withholding tax rate for dividends will be capped at 15%, while a 10% rate will apply to dividends paid to a company that holds directly or indirectly at least 20% of the capital of the company that pays the dividends.
In addition, payments of interest and royalties will be subject to a maximum withholding tax rate of 10%, while certain payments of interest will be exempt.
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