(Asahi: November 27, 2015 – p. 4)
With the aim of facilitating economic activities between Japan and Taiwan, a [bilateral] tax treaty to prevent double taxation was concluded on Nov. 26 between the Interchange Association, Japan, and the East Asia Relations Commission, the negotiators of the treaty. The Japanese government plans to submit a bill to revise the relevant tax laws to the ordinary session of the Diet next year.
Currently, when Japanese companies repatriate dividends from their Taiwanese subsidiaries, 20% of the total is withheld [by Taiwanese authorities]. Under the treaty, that amount will be lowered to 10%. The treaty also lowers tax rates on interest. In these and other ways, the treaty aims to stimulate economic investment between Japan and Taiwan.
According to Taiwan’s Ministry of Economic Affairs (MOEA), Japanese investment in Taiwan in 2014 increased by 34.3% year on year to reach $550 million. In recent years, investment in retail, services, and other nonmanufacturing industries has been notably strong, the MOEA says, but the monetary value and number of cases of investment are both sluggish overall. Moves to strengthen economic ties [with Taiwan] can be seen in various regions, as witnessed by the conclusion of a tax treaty between China and Taiwan in August this year.