Pursuant to the provisions in association with the term resident under a DTA, a resident of the ROC means a person being any of the following:
1. In the case of an individual, it refers to the individual residing in the ROC as specified in Paragraph 2, Article 7 of the Income Tax Act.
2. In the case of a company or any other body of persons, it refers to the following:
(1) The profit-seeking enterprise that is liable to tax on its total profit-seeking enterprise income derived within or outside the territory of the ROC as defined in Paragraph 2, Article 3 of the Income Tax Act.
(2) The organization or institution that is established for educational, cultural, public welfare, or charitable purposes as defined in Paragraph 4, Article 11 of the Income Tax Act.
(3) The governments of various levels.
(4) The Public Service Pension Fund, the New Labor Pension Fund, the Old Labor Pension Fund, the Labor Insurance Fund, the National Pension Insurance Fund, and any other entity that is recognized by the Ministry of Finance as established by the governments of various levels for non-profit-seeking purposes and directly or indirectly wholly-owned or controlled thereby.
(5) Any other person that is liable to tax on its total income derived within or outside the territory of the ROC in accordance with the stipulations under the Income Tax Act or other laws.
A resident of the other Contracting State is recognized based on the Certificate of Residence issued by the other Contracting State in accordance with the provisions in association with the term resident under the applicable DTA.

Where an individual is a resident of both Contracting States pursuant to the stipulations of these Contracting States’ respective domestic tax laws, the criteria provided under a relevant DTA for determining that individual’s sole resident status for the purposes of that DTA shall be applicable and apply in a sequential order. The definitions of those criteria used and determinative factors adopted for those criteria, which may be of a relevant sequence depending on the applicable DTA, are as follows:
1. The term “permanent home” means a place where an individual owns, rents, or arranges by any other means, and is available to that individual as a residence at all times and continuously for a period of 183 days.
2. The term “the place with which that individual’s personal and economic relations are closer (center of vital interests)” shall be determined by giving overall consideration to factors, such as: the individual’s family and social relations; the individual’s occupation; the individual’s political, cultural, or other activities; the individual’s place of business; the place from which the individual administers properties; and other relevant factors.
3. The term “habitual abode” shall be determined by comparing the length of time and frequency of the individual’s stays in the Contracting States.
4. The term “national” means any individual possessing nationality in accordance with the Nationality Act of a Contracting State.
Where a person other than an individual is a resident of both Contracting States based on the stipulations of these Contracting States’ respective domestic tax laws, and a relevant DTA thereof provides that the place of effective management may be of use to determine that person’s sole resident status for the purposes of that DTA, the determination for a location to be as the place of effective management shall be made by giving overall consideration to the following factors:
1. The location of the place from which the individual derives its resident status or where the head office is located whereby such individual or head office is the decisive person who makes significant decisions in business management, financial management, and personnel management; or the location of the place where the preceding significant decisions are made.
2. The location of the place where financial statements, records of accounting books, minutes of meetings of the Board of Directors, or minutes of meetings of shareholders are prepared or stored.
3. The location of the place where major business activities are carried out.

The term “permanent establishment” mentioned in a DTA means a fixed place of business through which the business of an enterprise is wholly or partly carried on. However, in the case that the provisions of the applicable DTA establish other conditions where a permanent establishment may be constituted, be deemed to exist, or be deemed not to include certain situations, provisions thereof shall prevail.
An enterprise of the other Contracting State shall be determined to have a permanent establishment in the ROC if the enterprise has the place of business in the territory of the ROC which is in conformity with each of the following subparagraphs:
1. A fixed place of business. The term “a fixed place of business” means a particular area that has commercial and geographical coherence with respect to the carrying on of the business, which may include housing, facilities, or equipment that is fixed to stand on the soil of that particular area or remain within that particular area. An enterprise of the other Contracting State shall be considered to have a fixed place of business if the business of the enterprise is carried on through automatic equipment which is operated and maintained by that enterprise;
2. With a fixed place of business mentioned in the preceding subparagraph and the business has been carried on continuously for a period of six months through that fixed place of business, or less than six months but the business has been regularly carried on through that fixed place of business; and
3. With a fixed place of business mentioned in Subparagraph 1 and that fixed place of business is at the disposal of or used by the enterprise of the other Contracting State.

Pursuant to the provisions in association with the term permanent establishment under a DTA, where an enterprise of the other Contracting State carries on a building site, construction, installation, or assembly project in the territory of the ROC for a period of time exceeding a certain duration of time, and based on which the enterprise constitutes or is deemed to have a permanent establishment in the territory of the ROC, the duration of time shall be determined by the calculation of the total period of time from the date on which the contractor begins his work on building, construction, installation, or assembly, including any preparatory work, until the work is completed or the project is permanently abandoned. Seasonal or other temporary interruptions shall be included in determining the duration of time. If an enterprise which has undertaken the performance of a comprehensive project subcontracts parts of such a project to other enterprises, the period spent by a subcontractor working on such a project shall be included in determining the duration of time.
The term “building site, construction, installation, or assembly project” mentioned in the preceding paragraph includes the work of building, renovation, excavation, dredging, and laying of pipe-lines for a building, road, bridge, canal, etc. project.

Pursuant to the provisions in association with the term permanent establishment under a DTA, where an enterprise of the other Contracting State carries on management or supervisory activities in the territory of the ROC in connection with a building site, construction, installation, or assembly project for a period of time exceeding a certain duration of time, or furnishes services in the territory of the ROC where activities of that nature continue through employees or other personnel or persons engaged by the enterprise (including individuals and body corporate) for such purpose for a period or periods of time aggregated exceeding a certain duration of time, and based on which the enterprise constitutes or is deemed to have a permanent establishment in the ROC, the duration of time shall be determined by the computation of the total of the aggregated days of presence of employees or other personnel or persons engaged by the enterprise to furnish services within the territory of the ROC. However, in the case that an investigator appointed by the tax collection authority concerned or the Taxation Administration of the Ministry of Finance finds that the enterprise has also engaged in activities outside the territory of the ROC and such activities have a close connection to the services furnished within the territory of the ROC (including the preparatory work), the total number of days spent in such activities shall be included in the calculation of the aforementioned duration of time.
Pursuant to the provisions in association with the term independent personal services under a DTA, where a resident of the other Contracting State for the purpose of performing professional services or other activities of an independent character stays for a period or periods aggregated exceeding a certain duration of time within the territory of the ROC, and based on which that resident of the other Contracting State is subject to income tax, the computation of the duration of time stated in the preceding paragraph shall be accorded mutatis mutandis to the determination of the duration of stay of this case.
The computation of the duration of time or stay referred to in the preceding two paragraphs shall be determined by the aggregation of the days commencing from the next day of the arrival and ending on the day of departure, of the relevant personnel, and include weekends, national holidays, annual leave, personal leave, sick leave, or bereavement leave, the departure day and temporary cessation of work due to strikes, training, etc. If the services are provided by two or more members of personnel and there is an overlap in the periods of their stay in the territory of the ROC, the overlapping period shall not be counted twice for the computation of the duration of time.
Pursuant to the provisions in association with the term permanent establishment or independent personal services under a DTA, where the calculation of the duration of time mentioned in Paragraph 1 or the duration of stay mentioned in Paragraph 2 is formulated to be measured within any twelve-month period commencing or ending in the fiscal, income, taxable, or calendar year (hereinafter referred to as the “relevant year”) concerned, the said “any twelve-month period commencing or ending in the relevant year concerned” shall refer to any consecutive twelve months within the period from the day that is counting backward from the first day of the relevant year until the completion of a complementary twelve-month period, to the day that is counting forwards from the last day of the relevant year until the completion of a complementary twelve-month period.
Pursuant to the provisions in association with the term permanent establishment under a DTA, where an enterprise of the other Contracting State furnishes services in the territory of the ROC through employees or other personnel or persons engaged by the enterprise (including individuals and body corporate) for such purpose, and the days of presence of employees or other personnel or persons engaged by the enterprise for the same or a connected project are required to be aggregated for the calculation of these persons’ duration of stay, the term “the same project” shall refer to the services provided for the same project from the perspective of that enterprise of the other Contracting State; whereas, the term “a connected project” shall refer to where the services are provided in the context of separate projects carried on by that enterprise of the other Contracting State but whose projects have a commercial coherence. To determine whether projects have a commercial coherence, the following factors shall be given an overall consideration:
1. The projects are covered by a single master contract. In the case that the projects are covered by different contracts, these different contracts were concluded with the same person or with related persons and the conclusion of the additional contracts would reasonably have been expected when concluding the first contract.
2. The nature of the work involved under the different projects is the same.
3. The same individuals are performing the services under the different projects.
4. Other circumstances where different projects can be adequately considered as having commercial coherence.

Pursuant to the provisions in association with the term permanent establishment under a DTA, where a person who is acting on behalf of an enterprise and has, and habitually exercises, in the territory of the ROC an authority to conclude contracts in the name of the enterprise, it shall refer to any person, who may be an individual or individuals, company or companies, or any other body of persons, is acting on behalf of an enterprise and has, and habitually exercises, in the territory of the ROC, an authority to conclude contracts in the name of the enterprise, sign documents in a way binding on the enterprise, or negotiate all elements and details of a contract. However, the aforementioned person does not include an agent conducting activities for the enterprise solely of a preparatory or auxiliary character or an independent agent.
Pursuant to the provisions in association with the term permanent establishment under a DTA, the term “independent agent” refers to an agent acting in the ordinary course of the business when acting on behalf of an enterprise of the other Contracting State.

Pursuant to the provisions in association with the term permanent establishment under a DTA, where a permanent establishment is used or maintained solely for the purpose of a specified activity or any combination of specified activities, and for that reason that permanent establishment may be deemed not to be constituted in the territory of the ROC, those specified activities or any combination of specified activities referring in the provisions under such DTA shall be limited to those of a preparatory or auxiliary character.
The term “of a preparatory character” mentioned in the preceding paragraph means an activity which is ancillary in nature and is carried out to precede the conducts that constitute the essential and significant part of the business activity of an enterprise as a whole in the territory of the ROC. The term “of an auxiliary character” means a specified activity or any combination of specified activities under a DTA carried on as mentioned in the preceding paragraph that is not a core, essential or significant part of the business activity performed by an enterprise of the other Contracting State within and outside the territory of the ROC as a whole.

Pursuant to the provisions in association with the term shipping and air transport under a DTA, where it illustrates that “profits of an enterprise of the other Contracting State from the operation of ships and aircraft in international traffic,” said profits shall include the following; however, in the case that the applicable DTA provides otherwise, provisions thereof shall prevail.
1. Profits from the rental on a full-time or voyage basis of ships or aircraft.
2. Profits from the rental on a bareboat basis of ships or aircraft or profits from the use, maintenance, or rental of containers (including trailers and related equipment for the transport of containers) used for the transport of goods or merchandise, where such rental or such use, maintenance, or rental, as the case may be, is incidental to the operation of ships or aircraft in international traffic.
3. Profits from the engaging of any other activities that are incidental to the operation of ships and aircraft in international traffic.

Pursuant to the provisions in association with the term dividends under a DTA, where it illustrates that “the term dividends means income from shares or other rights, not being debt-claims, participating in profits,” it shall, in the case of the ROC, refer to the dividends distributed by a company or the surplus profits distributed by a cooperative, other juristic person, sole proprietorship, or partnership to its member, investor, sole proprietor, or partner. However, in the case that the applicable DTA provides otherwise, provisions thereof shall prevail.

Pursuant to the provisions in association with the term royalties under a DTA, where it illustrates that “the term royalties means payments received as a consideration for the use of, or the right to use any copyright of relevant work,” it shall, in the case of the works of computer programs contained within a computer software, refer to payments for the exploitation or reproduction of, or the right to exploit or reproduce a set of instructions contained within that computer software, and these instructions were composed as a set in a way for, directly or indirectly, enabling a computer to produce a certain result. However, in the case that a payment is made for the use, operation, or reproduction of a computer software for one’s own purposes so as to enjoy the output from that computer software, to be entertained, or to archive backup, such payment is not royalties as denoted under a DTA.
Pursuant to the provisions in association with the term royalties under a DTA, where it illustrates that “the term royalties means payments received as a consideration for information concerning industrial, commercial, or scientific experiences,” the basis for determination thereof shall be the fulfillment of each of the following subparagraphs:
1. The information supplied already exists, is maintained in ways unrevealed to the public, and needs to be kept confidential; and
2. For the supply of the information, there would be hardly any additional activities which need to be done by the supplier, and there is no guarantee as to any benefit that might be brought about by the use of the supplied information.

Pursuant to the provisions in association with the term capital gains under a DTA, where there are gains derived by a resident of the other Contracting State from the alienation of shares in a company, and the ROC may tax such gains from the alienation of shares due to these shares derived more than a certain percent of their value from immovable property situated in the ROC, the proportion of the value of the alienated shares that is derived from immovable property situated in the ROC shall be determined at the time of the alienation of shares by a fraction calculation of which the numerator is to be the aggregated market value of the immovable properties of the company situated in the territory of the ROC, while the denominator is to be the aggregated market value of all assets of that company.
In the event that the market value of the immovable proprieties of the company situated in the territory of the ROC referred to in the preceding paragraph is unknown or difficult to determine, the relevant values used for the fraction calculation may be determined based on the amounts stated in the balance sheet of its most recently filed annual profit-seeking enterprise income tax return. In the case that the company in question is a profit-seeking enterprise having its head office outside the territory of the ROC, those values may be determined based on the amounts stated in its most recent balance sheet prepared for financial accounting purposes.

Pursuant to the provisions in association with the term independent personal services under a DTA, where a resident of the other Contracting State for the purpose of performing professional services or other activities of an independent character has a fixed base within the territory of the ROC, and based on which that resident of the other Contracting State is subject to income tax, the determination of that resident of the other Contracting State to have a fixed base in the ROC shall accord with the provisions of Paragraph 2, Article 7 of these Regulations, mutatis mutandis.

Pursuant to the provisions in association with the term income from employment under a DTA, where a resident of the other Contracting State is present in the territory of the ROC for a period or periods aggregated not exceeding a certain duration of time, and based on which that resident of the other Contracting State is entitled to the reduction of or exemption from income tax, the computation of the duration of stay of that resident of the other Contracting State shall be determined by the aggregation of days commencing from the next day of the arrival and ending on the day of departure, and include weekends, national holidays, annual leave, personal leave, sick leave, or bereavement leave, the departure day and temporary cessation of work due to strikes, training, etc.
Pursuant to the provisions in association with the term income from employment under a DTA, where the calculation of the duration of stay for a period or periods aggregated mentioned in the preceding paragraph is formulated to be measured within any twelve-month period commencing or ending in the relevant year concerned, the said “any twelve-month period commencing or ending in the relevant year concerned” shall refer to any consecutive twelve months within the period from the day that is counting backward from the first day of the relevant year until the completion of a complementary twelve-month period, to the day that is counting forwards from the last day of the relevant year until the completion of a complementary twelve-month period.
When calculating the duration of stay of a resident of the other Contracting State for a period or periods aggregated in the territory of the ROC is based on the rules mentioned in the preceding two paragraphs, those days of presence of said resident of the other Contracting State during which such person used the identity of a resident of the ROC and that identity was determined pursuant to the applicable DTA shall not be taken into account to calculate the duration of stay in the ROC.