The Taipei Economic and Cultural Office in Tel-Aviv and the Isr-
ael Economic and Cultural Office in Taipei,
Noting that the responsible authorities of their respective cou-
ntries intend to provide reciprocal relief from taxation to shi-
pping enterprises resident on Taiwan and in Israel,
Confirm the understanding on this matter as follows:
I.COVERAGE
1.The existing taxes to which the Memorandum of Understanding
shall apply include:
(a) on Taiwan, the profit seeking enterprise income tax; and
(b) in Israel, the corporate income tax.
2.This Memorandum of Understanding shall also apply to any id-
entical or substantially similar taxes to be imposed in add-
ition to, or in place of, the existing taxes, after the date
of signature of this Memorandum of Understanding.
3.On Taiwan, shipping enterprises resident in Israel shall be
exempt from tax on the income, profits or revenue derived f-
rom international traffic earned on Taiwan.
4.In Israel, shipping enterprises resident on Taiwan shall be
exempt from tax on the income, profits or revenue derived f-
rom international traffic earned in Israel.
5.The provisions of the preceding paragraphs shall also apply
to income, profits or revenue derived from the participation
in a pool, a joint business or an international operating a-
gency.

II.DEFINITIONS
For the purposes of this Memorandum of Understanding, unless the
context otherwise requires:
(a) the term ”international traffic”means any transport by sh-
ips operated by a shipping enterprise, provided, however, t-
hat in respect of a shipping enterprise resident on Taiwan,
any voyage for which the principle purpose is to transport
passengers or goods between places within Israel shall be e-
xclusive and in respect of a shipping enterprise resident in
Israel, any voyage for which the principle purpose is to tr-
ansport passengers or goods between places on Taiwan shall
be exclusive;
(b) the term ”shipping enterprise”means an enterprise carrying
on the business of transporting passengers or goods by ships
; and
(c) the term ”income, profits or revenue derived from internat-
ional traffic”means all income, profits or revenue from the
operation of ships in international traffic, including inco-
me, profits or revenue from the lease of ships on a full ti-
me, voyage or bareboat charter basis, and of containers and
related equipment, which is merely incidental to the operat-
ion of ships by the lessor, provided that the leased ships
or the containers and related equipment, are used in operat-
ions by lessee.
(d) the term ”resident”means any legal entity which, under the
laws of Israel and/or Taiwan, is liable to tax therein by r-
eason of his domicile, residence, place of management or any
other criterion of a similar nature.

III.NOTIFICATION AND CONSULTATIONS
1.At the end of each calendar year, the Taipei Economic and Cul-
tural Office in Tel-Aviv and the Israel Economic and Cultural
Office in Taipei shall notify each other of any significant c-
hanges in the relevant tax laws and regulations which might a-
ffect reciprocal exemptions and the principle of reciprocal b-
enefits.
2.Consultation may be requested at any time by the Taipei Econo-
mic and Cultural Office in Tel-Aviv or the Israel Economic and
Cultural Office in Taipei for any amendment to the present Me-
morandum of Understanding, and for any question relating to t-
he application or interpretation thereof. Such a consultation
will begin within 60 days from the date of receipt of any such
request, and decisions shall be by mutual consent.

IV.ENTRY INTO EFFECT
This Memorandum of Understanding shall enter into effect upon t-
he latter signature and shall have effect with respect to taxab-
le years beginning after December 31, 1997.

V.TERMINATION
The Taipei Economic and Cultural Office in Tel-Aviv and the Isr-
ael Economic and Cultural Office in Taipei may terminate this M-
emorandum of Understanding by giving written notice of terminat-
ion to the other on or before 30 June in any year; in such case,
this Memorandum of Understanding shall cease to be effective 1
January of the following calendar year.

IN WITNESS THEREOF the undersigned, being duly authorized, have
signed this Memorandum of Understanding in duplicate in the Eng-
lish language.

FOR THE TAIPEI ECONOMIC AND FOR THE ISRAEL ECONOMIC AND
CULTURAL OFFICE IN TEL-AVIV CULTURAL OFFICE IN TAIPEI

[Signed] [Signed]
C.H. Chung Akiva Tor
Date: June 30, 1998 Date: June 19, 1998
Place: Israel Place: Taipei