THE TAIPEI ECONOMIC AND CULTURAL OFFICE IN CANADA AND THE
CANADIAN TRADE OFFICE IN TAIPEI,

DESIRING to conclude an Arrangement for the avoidance of double
taxation and the prevention of fiscal evasion with respect to
taxes on income,

HAVE reached the following Arrangement:

I. SCOPE OF THE ARRANGEMENT
SECTION 1
Persons Covered
This Arrangement will apply to persons who are residents of one
or both of the territories, as defined in this Arrangement.

SECTION 2
Taxes Covered
1. The existing taxes to which the Arrangement will apply are:
(a) in the territory in which the income tax law administered by
the Canada Revenue Agency is applied, the taxes imposed
under the Income Tax Act; and
(b) in the territory in which the taxation law administered by
the Taxation Administration, Ministry of Finance, Taiwan is
applied:
(i) the profit seeking enterprise income tax;
(ii) the individual consolidated income tax; and
(iii) the income basic tax.
2. The Arrangement will apply also to any identical or
substantially similar taxes that are imposed after the date
of signature of the Arrangement in addition to, or in place
of, the existing taxes. The competent authorities of the
territories will notify each other of any significant changes
which have been made in the taxation laws of their respective
territories.

II. DEFINITIONS
SECTION 3
General Definitions
1. For the purposes of this Arrangement, unless the context
otherwise requires:
(a) the term “ territory ” refers to the geographic area over
which the Canada Revenue Agency exercises jurisdiction, or
the geographic area over which the Taxation Administration,
Ministry of Finance, Taiwan exercises jurisdiction. As the
context requires, “ other territory ” and “ territories
” will be construed accordingly;
(b) the term “ person ” includes an individual, a trust, a
company and any other body of persons;
(c) the term “ company ” means any body corporate or any
entity which is treated as a body corporate for tax
purposes;
(d) the term “ enterprise ” applies to the carrying on of any
business;
(e) the terms “ enterprise of a territory ” and “ enterprise
of the other territory ” mean respectively an enterprise
carried on by a resident of a territory and an enterprise
carried on by a resident of the other territory;
(f) the term “ international traffic ” means any transport by
a ship or aircraft operated by an enterprise of a territory,
except when such transport is principally between places in
the other territory;
(g) the term “competent authority” means:
(i) in the case of the territory in which the income tax law
administered by the Canada Revenue Agency is applied, the
Minister of National Revenue or the Minister ’ s authorized
representative; and
(ii) in the case of the territory in which the taxation law
administered by the Taxation Administration, Ministry of
Finance, Taiwan is applied, the Minister or the Minister ’
s authorized representative.
2. As regards the application of the Arrangement at any time in
a territory, any term not defined therein will, unless the
context otherwise requires, have the meaning that it has at
that time under the law of that territory for the purposes of
the taxes to which the Arrangement applies, any meaning under
the applicable tax laws of that territory prevailing over a
meaning given to the term under other laws of that territory.

SECTION 4
Resident
1. For the purposes of this Arrangement, the term “ resident of
a territory ” means:
(a) any person who, under the laws of that territory, is liable
to tax therein by reason of the person ’ s domicile,
residence, place of incorporation, place of management or
any other criterion of a similar nature; and
(b) the government of that territory or of a subdivision or
local authority thereof or any agency or instrumentality of
any such government or local authority.
2. A person is not a resident of a territory for the purposes of
this Arrangement if that person is liable to tax in that
territory only in respect of income from sources in that
territory. However, this paragraph will not apply to
individuals who are residents of the territory referred to in
paragraph 1 (b) of Section 2, as long as all resident
individuals of that territory are liable to tax only in
respect of income from sources in that territory.
3. Where by reason of the provisions of paragraph 1 an
individual is a resident of both territories, then the
individual ’ s status will be determined as follows:
(a) the individual will be deemed to be a resident only of the
territory in which the individual has a permanent home
available and if the individual has a permanent home
available in both territories, the individual will be deemed
to be a resident only of the territory with which the
individual ’ s personal and economic relations are closer
(centre of vital interests);
(b) if the territory in which the individual ’ s centre of
vital interests is situated cannot be determined, or if
there is not a permanent home available to the individual in
either territory, the individual will be deemed to be a
resident only of the territory in which the individual has
an habitual abode;
(c) if the individual has an habitual abode in both territories
or in neither of them, the competent authorities of the
territories will settle the question by mutual agreement.
4. Where by reason of the provisions of paragraph 1 a person
other than an individual is a resident of both territories,
the competent authorities of the territories will by mutual
agreement endeavour to settle the question, having regard to
its place of effective management, the place where it is
incorporated or otherwise constituted and any other relevant
factors, and to determine the mode of application of the
Arrangement to such person. In the absence of mutual
agreement, that person will not be entitled to claim any
relief or exemption from tax provided by this Arrangement.

SECTION 5
Permanent Establishment
1. For the purposes of this Arrangement, the term “ permanent
establishment ” means a fixed place of business through
which the business of an enterprise is wholly or partly
carried on.
2. The term “permanent establishment” includes especially:
(a) a place of management;
(b) a branch;
(c) an office;
(d) a factory;
(e) a workshop; and
(f) a mine, an oil or gas well, a quarry or any other place
relating to the exploration for or the exploitation of
natural resources.
3. A building site or construction or installation project
constitutes a permanent establishment only if it lasts more
than six months.
4. An enterprise of a territory will be deemed to have a
permanent establishment in the other territory if:
(a) it carries on supervisory activities within the other
territory for more than six months in connection with a
building site or construction or installation project which
is being undertaken in the other territory;
(b) it furnishes services, including consultancy services,
through employees or other personnel or persons engaged by
the enterprise for such purpose, but only where activities
of that nature continue within that other territory, for the
same or a connected project, for a period or periods
aggregating more than 183 days within any twelve month
period.
5. Notwithstanding the preceding provisions of this Section, the
term “ permanent establishment ” will be deemed not to
include:
(a) the use of facilities solely for the purpose of storage,
display or delivery of goods or merchandise belonging to the
enterprise;
(b) the maintenance of a stock of goods or merchandise belonging
to the enterprise solely for the purpose of storage, display
or delivery;
(c) the maintenance of a stock of goods or merchandise belonging
to the enterprise solely for the purpose of processing by
another enterprise;
(d) the maintenance of a fixed place of business solely for the
purpose of purchasing goods or merchandise or of collecting
information, for the enterprise;
(e) the maintenance of a fixed place of business solely for the
purpose of carrying on, for the enterprise, any other
activity of a preparatory or auxiliary character;
(f) the maintenance of a fixed place of business solely for any
combination of activities mentioned in subparagraphs (a) to
(e), provided that the overall activity of the fixed place
of business resulting from this combination is of a
preparatory or auxiliary character.
6. Notwithstanding the provisions of paragraphs 1 and 2, where a
person – other than an agent of an independent status to
whom paragraph 7 applies – is acting on behalf of an
enterprise and has, and habitually exercises, in a territory
an authority to conclude contracts on behalf of the
enterprise, that enterprise will be deemed to have a
permanent establishment in that territory in respect of any
activities which that person undertakes for the enterprise,
unless the activities of such person are limited to those
mentioned in paragraph 5 which, if exercised through a fixed
place of business, would not make this fixed place of
business a permanent establishment under the provisions of
that paragraph.
7. An enterprise will not be deemed to have a permanent
establishment in a territory merely because it carries on
business in that territory through a broker, general
commission agent or any other agent of an independent status,
provided that such persons are acting in the ordinary course
of their business.
8. The fact that a company which is a resident of a territory
controls or is controlled by a company which is a resident of
the other territory, or which carries on business in that
other territory (whether through a permanent establishment or
otherwise), will not of itself constitute either company a
permanent establishment of the other.

III. TAXATION OF INCOME
SECTION 6
Income from Immovable Property
1. Income derived by a resident of a territory from immovable
property (including income from agriculture or forestry)
situated in the other territory may be taxed in that other
territory.
2. The term “ immovable property ” will have the meaning which
it has for the purposes of the relevant tax law of the
territory in which the property in question is situated. The
term will in any case include property accessory to immovable
property, livestock and equipment used in agriculture and
forestry, rights to which the provisions of general law
respecting landed property apply, usufruct of immovable
property and rights to variable or fixed payments as
consideration for the working of, or the right to work,
mineral deposits, sources and other natural resources. Ships,
boats and aircraft will not be regarded as immovable
property.
3. The provisions of paragraph 1 will apply to income derived
from the direct use, letting, or use in any other form of
immovable property and to income from the alienation of such
property.
4. The provisions of paragraphs 1 and 3 will also apply to the
income from immovable property of an enterprise and to income
from immovable property used for the performance of
independent personal services.

SECTION 7
Business Profits
1. The profits of an enterprise of a territory will be taxable
only in that territory unless the enterprise carries on
business in the other territory through a permanent
establishment situated therein. If the enterprise carries on
business as aforesaid, the profits of the enterprise may be
taxed in the other territory but only so much of them as is
attributable to that permanent establishment.
2. Subject to the provisions of paragraph 3, where an enterprise
of a territory carries on business in the other territory
through a permanent establishment situated therein, there
will in each territory be attributed to that permanent
establishment the profits which it might be expected to make
if it were a distinct and separate enterprise engaged in the
same or similar activities under the same or similar
conditions and dealing wholly independently with the
enterprise of which it is a permanent establishment and with
all other persons.
3. In the determination of the profits of a permanent
establishment, there will be allowed as deductions expenses
which are incurred for the purposes of the permanent
establishment, including executive and general administrative
expenses, whether incurred in the territory in which the
permanent establishment is situated or elsewhere.
4. No profits will be attributed to a permanent establishment by
reason of the mere purchase by that permanent establishment
of goods or merchandise for the enterprise.
5. For the purposes of the preceding paragraphs, the profits to
be attributed to the permanent establishment will be
determined by the same method year by year unless there is
good and sufficient reason to the contrary.
6. Where profits include items of income which are dealt with
separately in other Sections of this Arrangement, then the
provisions of those Sections will not be affected by the
provisions of this Section.

SECTION 8
Shipping and Air Transport
1. Profits derived by an enterprise of a territory from the
operation of ships or aircraft in international traffic will
be taxable only in that territory.
2. Notwithstanding the provisions of paragraph 1 and Section 7,
profits derived by an enterprise of a territory from a
transport by a ship or aircraft, where such transport is
principally between places in the other territory, may be
taxed in that other territory. However, this paragraph will
not apply to a transport between places in the other
territory which is incidental or supplementary to
international traffic.
3. For the purposes of this Section, profits from the operation
of ships or aircraft in international traffic include:
(a) profits from the rental on a full (time or voyage) basis or
a bareboat basis of ships or aircraft; and
(b) 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.
4. The provisions of paragraphs 1 and 2 will also apply to
profits from the participation in a pool, a joint business or
an international operating agency, but only to so much of the
profits so derived as is attributable to the participant in
proportion to its share in the joint operation.

SECTION 9
Associated Enterprises
1. Where:
(a) an enterprise of a territory participates directly or
indirectly in the management, control or capital of an
enterprise of the other territory; or
(b) the same persons participate directly or indirectly in the
management, control or capital of an enterprise of a
territory and an enterprise of the other territory,
and in either case conditions are made or imposed between the
two enterprises in their commercial or financial relations
that differ from those that would be made between independent
enterprises, then any profits which would, but for those
conditions, have accrued to one of the enterprises, but, by
reason of those conditions, have not so accrued, may be
included in the profits of that enterprise and taxed
accordingly.
2. Where the government of a territory includes in the profits
of an enterprise of that territory – and taxes accordingly
– profits on which an enterprise of the other territory has
been charged to tax in that other territory and the profits
so included are profits that would have accrued to the
enterprise of the first-mentioned territory if the conditions
made between the two enterprises had been those that would
have been made between independent enterprises, then that the
government of the other territory will make an appropriate
adjustment to the amount of tax charged therein on those
profits if the government of that other territory considers
the adjustment is justified. In determining such adjustment,
due regard will be had to the other provisions of this
Arrangement and the competent authorities of the territories
will if necessary consult each other.
3. The government of a territory will not change the income of
an enterprise in the circumstances referred to in paragraph 1
after the expiry of the time limits provided in its domestic
laws and, in any case, after eight years from the end of the
year in which the income that would be subject to such change
would, but for the conditions referred to in paragraph 1,
have been attributed to that enterprise.
4. The provisions of paragraphs 2 and 3 will not apply in the
case of fraud or wilful default.

SECTION 10
Dividends
1. Dividends paid by a company which is a resident of a
territory to a resident of the other territory may be taxed
in that other territory.
2. However, such dividends may also be taxed in the territory of
which the company paying the dividends is a resident and
according to the laws of that territory, but if the
beneficial owner of the dividends is a resident of the other
territory, the tax so charged will not exceed:
(a) 10 per cent of the gross amount of the dividends if the
beneficial owner is a company that holds directly or
indirectly at least 20 per cent of the capital of the
company paying the dividends; and
(b) 15 per cent of the gross amount of the dividends, in all
other cases.
This paragraph will not affect the taxation of the company in
respect of the profits out of which the dividends are paid.
3. The term “ dividends ” as used in this Section means income
from shares, “ jouissance ” shares or “ jouissance ”
rights, mining shares, founders ’ shares or other rights,
not being debt-claims, participating in profits, as well as
income which is subjected to the same taxation treatment as
income from shares by the laws of the territory of which the
company making the distribution is a resident.
4. The provisions of paragraphs 1 and 2 will not apply if the
beneficial owner of the dividends, being a resident of a
territory, carries on business in the other territory of
which the company paying the dividends is a resident, through
a permanent establishment situated therein, or performs in
that other territory independent personal services from a
fixed base situated therein, and the holding in respect of
which the dividends are paid is effectively connected with
such permanent establishment or fixed base. In such case the
provisions of Section 7 or Section 14 will apply.
5. Where a company that is a resident of a territory derives
profits or income from the other territory, the government of
that other territory may not impose any tax on the dividends
paid by the company, except insofar as such dividends are
paid to a resident of that other territory or insofar as the
holding in respect of which the dividends are paid is
effectively connected with a permanent establishment or a
fixed base situated in that other territory, nor subject the
company ’ s undistributed profits to a tax on the company ’
s undistributed profits, even if the dividends paid or the
undistributed profits consist wholly or partly of profits or
income arising in such other territory.
6. Nothing in this Arrangement will be construed as preventing
the government of a territory from imposing on the earnings
of a company attributable to a permanent establishment in
that territory, or the earnings attributable to the
alienation of immovable property situated in that territory
by a company carrying on a trade in immovable property, a tax
in addition to the tax that would be chargeable on the
earnings of a company that is a resident of that territory,
except that any additional tax so imposed will not exceed 10
per cent of the amount of such earnings that have not been
subjected to such additional tax in previous taxation years.
For the purpose of this provision, the term “ earnings ”
means the earnings attributable to the alienation of such
immovable property situated in a territory as may be taxed by
the government of that territory under the provisions of
Section 6 or of paragraph 1 of Section 13, and the profits,
including any gains, attributable to a permanent
establishment in a territory in a year and previous years,
after deducting therefrom all taxes, other than the
additional tax referred to herein, imposed on such profits in
that territory.
7. A resident of a territory is not entitled to any benefits
provided under this Section in respect of a dividend if one
of the main purposes of any person concerned with the
creation, assignment or transfer of the dividend, or with the
creation, assignment, acquisition or transfer of the shares
or other rights in respect of which the dividend is paid, or
with the establishment, acquisition or maintenance of the
person that is the beneficial owner of the dividend, is for
that resident to obtain the benefits of this Section.

SECTION 11
Interest
1. Interest arising in a territory and paid to a resident of the
other territory may be taxed in that other territory.
2. However, such interest may also be taxed in the territory in
which it arises and according to the laws of that territory,
but if the beneficial owner of the interest is a resident of
the other territory, the tax so charged will not exceed 10
per cent of the gross amount of the interest.
3 Notwithstanding the provisions of paragraph 2:
(a) interest arising in the territory in which the taxation laws
administered by the Taxation Administration, Ministry of
Finance, Taiwan are applied and paid to a resident of the
territory in which the income tax law administered by the
Canada Revenue Agency is applied will be taxable only in the
latter territory if it is paid in respect of a loan made,
guaranteed or insured, or a credit extended, guaranteed or
insured by Export Development Canada;
(b) interest arising in the territory in which the income tax
law administered by the Canada Revenue Agency is applied and
paid to a resident of the territory in which the taxation
laws administered by the Taxation Administration, Ministry
of Finance, Taiwan are applied will be taxable only in the
latter territory if it is paid in respect of a loan made,
guaranteed or insured, or a credit extended, guaranteed or
insured by the instrumentalities which aim at promoting
export and are approved by the Taxation Administration,
Ministry of Finance, Taiwan; and
(c) interest arising in a territory and paid to:
(i) the authority administering the other territory or a
subdivision or local authority thereof,
(ii) the central bank of the other territory, or
(iii) an entity owned by the authority administering the other
territory and mutually agreed upon by the competent
authorities of the territories; will be taxable only in
that other territory.
4. The term “ interest ” as used in this Section means income
from debt-claims of every kind, whether or not secured by
mortgage, and in particular, income from government
securities and income from bonds or debentures, including
premiums and prizes attaching to such securities, bonds or
debentures, as well as income which is subjected to the same
taxation treatment as income from money lent by the laws of
the territory in which the income arises. However, the term
“ interest ” does not include income dealt with in Section
10.
5. The provisions of paragraphs 2 and 3 will not apply if the
beneficial owner of the interest, being a resident of a
territory, carries on business in the other territory in
which the interest arises, through a permanent establishment
situated therein, or performs in that other territory
independent personal services from a fixed base situated
therein, and the debt-claim in respect of which the interest
is paid is effectively connected with such permanent
establishment or fixed base. In such case the provisions of
Section 7 or Section 14 will apply.
6. Interest will be deemed to arise in a territory when the
payer is a resident of that territory. Where, however, the
person paying the interest, whether the payer is a resident
of a territory or not, has in a territory a permanent
establishment or a fixed base in connection with which the
indebtedness on which the interest is paid was incurred, and
such interest is borne by such permanent establishment or
fixed base, then such interest will be deemed to arise in the
territory in which the permanent establishment or fixed base
is situated.
7. Where, by reason of a special relationship between the payer
and the beneficial owner or between both of them and some
other person, the amount of the interest, having regard to
the debt-claim for which it is paid, exceeds the amount that
would have been agreed upon by the payer and the beneficial
owner in the absence of such relationship, the provisions of
this Section will apply only to the last-mentioned amount. In
such case, the excess part of the payments will remain
taxable according to the laws of each territory, due regard
being had to the other provisions of this Arrangement.
8. A resident of a territory is not entitled to any benefits
provided under this Section in respect of interest if one of
the main purposes of any person concerned with the creation,
assignment or transfer of the interest, or with the creation,
assignment, acquisition or transfer of the debt-claim or
other rights in respect of which the interest is paid, or
with the establishment, acquisition or maintenance of the
person that is the beneficial owner of the interest, is for
that resident to obtain the benefits of this Section.

SECTION 12
Royalties
1. Royalties arising in a territory and paid to a resident of
the other territory may be taxed in that other territory.
2. However, such royalties may also be taxed in the territory in
which they arise and according to the laws of that territory,
but if the beneficial owner of the royalties is a resident of
the other territory, the tax so charged will not exceed 10
per cent of the gross amount of the royalties.
3. The term “ royalties ” as used in this Section means
payments of any kind received as a consideration for the use
of, or the right to use, any copyright, patent, trade mark,
design or model, plan, secret formula or process or computer
software, or for the use of, or the right to use, industrial,
commercial or scientific equipment, or for information
concerning industrial, commercial or scientific experience,
and includes payments of any kind in respect of motion
picture films and works on film, videotape or other means of
reproduction for use in connection with television. However,
the term “ royalties ” does not include income dealt with
in Section 8.
4. The provisions of paragraph 2 will not apply if the
beneficial owner of the royalties, being a resident of a
territory, carries on business in the other territory in
which the royalties arise, through a permanent establishment
situated therein, or performs in that other territory
independent personal services from a fixed base situated
therein, and the right or property in respect of which the
royalties are paid is effectively connected with such
permanent establishment or fixed base. In such case the
provisions of Section 7 or Section 14 will apply.
5. Royalties will be deemed to arise in a territory when the
payer is a resident of that territory. Where, however, the
person paying the royalties, whether the payer is a resident
of a territory or not, has in a territory a permanent
establishment or a fixed base in connection with which the
liability to pay the royalties was incurred, and such
royalties are borne by such permanent establishment or fixed
base, then such royalties will be deemed to arise in the
territory in which the permanent establishment or fixed base
is situated.
6. Where, by reason of a special relationship between the payer
and the beneficial owner or between both of them and some
other person, the amount of the royalties, having regard to
the use, right or information for which they are paid,
exceeds the amount that would have been agreed upon by the
payer and the beneficial owner in the absence of such
relationship, the provisions of this Section will apply only
to the last-mentioned amount. In such case, the excess part
of the payments will remain taxable according to the laws of
each territory, due regard being had to the other provisions
of this Arrangement.
7. A resident of a territory is not entitled to any benefits
provided under this Section in respect of a royalty if one of
the main purposes of any person concerned with the creation,
assignment or transfer of the royalty, or with the creation,
assignment, acquisition or transfer of rights in respect of
which the royalty is paid, or with the establishment,
acquisition or maintenance of the person that is the
beneficial owner of the royalty, is for that resident to
obtain the benefits of this Section.

SECTION 13
Capital Gains
1. Gains derived by a resident of a territory from the
alienation of immovable property referred to in Section 6 and
situated in the other territory may be taxed in that other
territory.
2. Gains from the alienation of movable property forming part of
the business property of a permanent establishment which an
enterprise of a territory has in the other territory or of
movable property pertaining to a fixed base available to a
resident of a territory in the other territory for the
purpose of performing independent personal services,
including such gains from the alienation of such a permanent
establishment (alone or with the whole enterprise) or of such
fixed base, may be taxed in that other territory.
3. Gains derived by an enterprise of a territory from the
alienation of ships or aircraft operated in international
traffic or movable property pertaining to the operation of
such ships or aircraft will be taxable only in that
territory.
4. Gains derived by a resident of a territory from the
alienation of:
(a) shares, the value of which is derived principally from
immovable property situated in the other territory; or
(b) an interest in a partnership, trust or other entity, the
value of which is derived principally from immovable
property situated in that other territory;
may be taxed in that other territory.
5. Gains from the alienation of any property, other than that
referred to in paragraphs 1, 2, 3 and 4, will be taxable only
in the territory of which the alienator is a resident.
6. Notwithstanding paragraph 5, where an individual:
(a) ceases to be a resident of a territory and by reason thereof
is treated for the purposes of taxation in that territory as
having alienated a property and is taxed in that territory;
and
(b) at any time thereafter becomes a resident of the other
territory,
the government of the other territory may tax gains in
respect of the property only to the extent that such gains
had not accrued while the individual was a resident of the
first-mentioned territory. However, this provision will not
apply to property, any gain from which the government of the
other territory could have taxed in accordance with the
provisions of paragraphs 1 to 4 of this Section if the
individual had realized the gain before becoming a resident
of that other territory.

SECTION 14
Independent Personal Services
1. Income derived by an individual who is a resident of a
territory in respect of professional services or other
activities of an independent character will be taxable only
in that territory except in the following circumstances, when
such income may also be taxed in the other territory:
(a) if the individual has a fixed base regularly available in
the other territory for the purpose of performing the
individual ’ s activities; in that case, only so much of
the income as is attributable to that fixed base may be
taxed in that other territory; or
(b) if the individual is present in the other territory for a
period or periods amounting to or exceeding in the aggregate
183 days in any twelve month period commencing or ending in
the fiscal year concerned; in that case, only so much income
as is derived from activities performed in that other
territory may be taxed in that other territory.
2. The term “ professional services ” includes especially
independent scientific, literary, artistic, educational or
teaching activities as well as the independent activities of
physicians, lawyers, engineers, architects, dentists and
accountants.

SECTION 15
Dependent Personal Services
1. Subject to the provisions of Sections 16, 18 and 19,
salaries, wages and other remuneration derived by a resident
of a territory in respect of an employment will be taxable
only in that territory unless the employment is exercised in
the other territory. If the employment is so exercised, such
remuneration as is derived therefrom may be taxed in that
other territory.
2. Notwithstanding the provisions of paragraph 1, remuneration
derived by a resident of a territory in respect of an
employment exercised in the other territory will be taxable
only in the first-mentioned territory if:
(a) the recipient is present in the other territory for a period
or periods not exceeding in the aggregate 183 days in any
twelve month period commencing or ending in the fiscal year
concerned; and
(b) the remuneration is paid by, or on behalf of, an employer
who is not a resident of the other territory, and
(c) the remuneration is not borne by a permanent establishment
or a fixed base which the employer has in the other
territory.
3. Notwithstanding the preceding provisions of this Section,
remuneration derived in respect of an employment exercised
aboard a ship or aircraft operated in international traffic
by an enterprise of a territory will be taxable only in that
territory unless the remuneration is derived by a resident of
the other territory.

SECTION 16
Directors’ Fees
Directors ’ fees and other similar payments derived by a
resident of a territory in the capacity as a member of the board
of directors or a similar organ of a company which is a resident
of the other territory may be taxed in that other territory.

SECTION 17
Artistes and Sportspersons
1. Notwithstanding the provisions of Sections 14 and 15, income
derived by a resident of a territory as an entertainer, such
as a theatre, motion picture, radio or television artiste, or
a musician, or as a sportsperson, from that resident ’ s
personal activities as such exercised in the other territory,
may be taxed in that other territory.
2. Where income in respect of personal activities exercised by
an entertainer or a sportsperson in that individual ’ s
capacity as such accrues not to the entertainer or
sportsperson personally but to another person, that income
may, notwithstanding the provisions of Sections 7, 14 and 15
be taxed in the territory in which the activities of the
entertainer or sportsperson are exercised.
3. The provisions of paragraph 2 will not apply if it is
established that neither the entertainer or the sportsperson
nor persons related thereto participate directly or
indirectly in the profits of the person referred to in that
paragraph.

SECTION 18
Pensions and Annuities
1. Pensions and annuities arising in a territory and paid to a
resident of the other territory may be taxed in that other
territory, but the amount of any such payment that would be
excluded from taxable income in the first-mentioned territory
if the recipient were a resident thereof will be exempt from
taxation in that other territory.
2. Pensions arising in a territory and paid to a resident of the
other territory may also be taxed in the territory in which
they arise and according to the law of that territory.
However, in the case of periodic pension payments, the tax so
charged will not exceed the lesser of:
(a) 15 per cent of the gross amount of the payment; and
(b) the amount of tax that the recipient of the payment would
otherwise be required to pay for the year on the total
amount of the periodic pension payments received by the
individual in the year, if the individual were resident in
the territory in which the payment arises.
3. Annuities arising in a territory and paid to a resident of
the other territory may also be taxed in the territory in
which they arise and according to the law of that territory,
but the tax so charged will not exceed 15 per cent of the
portion thereof that is subject to tax in that territory.
However, this limitation does not apply to lump-sum payments
arising on the surrender, cancellation, redemption, sale or
other alienation of an annuity, or to payments of any kind
under an annuity contract the cost of which was deductible,
in whole or in part, in computing the income of any person
who acquired the contract.
4. Notwithstanding anything in this Arrangement, alimony and
other similar payments arising in a territory and paid to a
resident of the other territory who is subject to tax therein
in respect thereof will be taxable only in that other
territory, but the amount taxable in that other territory
will not exceed the amount that would be taxable in the
first-mentioned territory if the recipient were a resident
thereof.

SECTION 19
Government Service
1. (a) Salaries, wages and other similar remuneration, other
than a pension, paid by the government of a territory or
of a subdivision or a local authority thereof to an
individual in respect of services rendered to any of such
government or local authority will be taxable only in
that territory.
(b) However, such salaries, wages and other similar
remuneration will be taxable only in the other territory
if the services are rendered in that territory and the
individual is a resident of that territory who:
(i) is a citizen or a national of that territory; or
(ii) did not become a resident of that territory solely for the
purpose of rendering the services.
2. The provisions of paragraph 1 will not apply to salaries,
wages and other similar remuneration in respect of services
rendered in connection with a business carried on by the
government of a territory or of a subdivision or a local
authority thereof.

SECTION 20
Students
Payments which a student or business apprentice who is, or was
immediately before visiting a territory, a resident of the other
territory and who is present in the first-mentioned territory
solely for the purpose of that individual ’ s education or
training receives for the purpose of that individual ’ s
maintenance, education or training will not be taxed in that
territory, if such payments arise from sources outside that
territory.

SECTION 21
Other Income
1. Subject to the provisions of paragraph 2, items of income of
a resident of a territory, wherever arising, not dealt with
in the foregoing Sections of this Arrangement will be taxable
only in that territory.
2. However, if such income is derived by a resident of a
territory from sources in the other territory, such income
may also be taxed in the territory in which it arises and
according to the law of that territory. In the case of the
territory in which the income tax law administered by the
Canada Revenue Agency is applied, where such income is income
from a trust, other than a trust to which contributions were
deductible, the tax so charged will, if the income is taxable
in the territory in which the beneficial owner is a resident,
not exceed 15 per cent of the gross amount of the income.
3. The provisions of paragraph 1 will not apply to income, other
than income from immovable property as defined in paragraph 2
of Section 6, if the recipient of such income, being a
resident of a territory, carries on business in the other
territory through a permanent establishment situated therein,
or performs in that other territory independent personal
services from a fixed base situated therein, and the right or
property in respect of which the income is paid is
effectively connected with such permanent establishment or
fixed base. In such case the provisions of Section 7 or
Section 14 will apply.

IV. METHODS FOR ELIMINATION OF DOUBLE TAXATION
SECTION 22
Elimination of Double Taxation
1. In the case of the territory in which the income tax law
administered by the Canada Revenue Agency is applied, double
taxation will be avoided as follows:
(a) subject to the existing provisions of the law of the
territory in which the income tax law administered by the
Canada Revenue Agency is applied regarding the deduction
from tax payable in that territory of tax paid outside that
territory and to any subsequent modification of those
provisions – which will not affect the general principle
hereof – and unless a greater deduction or relief is
provided under the laws of that territory, tax payable in
the other territory on profits, income or gains arising in
that other territory will be deducted from any tax payable
in the first-mentioned territory in respect of such profits,
income or gains; and
(b) where, in accordance with any provision of the Arrangement,
income derived by a resident of the territory in which the
income tax law administered by the Canada Revenue Agency is
applied is exempt from tax in that territory, the government
of that territory may nevertheless, in calculating the
amount of tax on other income, take into account the
exempted income.
2. In the case of the territory in which the taxation laws
administered by the Taxation Administration, Ministry of
Finance, Taiwan are applied, double taxation will be avoided
as follows:
where a resident of the territory in which the taxation laws
administered by the Taxation Administration, Ministry of
Finance, Taiwan are applied derives income from the other
territory (but excluding, in case of a dividend, tax paid in
respect of the profits out of which the dividend is paid),
the amount of tax on that income paid in the other territory
and in accordance with the provisions of this Arrangement,
will be credited against the tax levied in the
first-mentioned territory imposed on that resident. The
amount of credit, however, will not exceed the amount of the
tax in the first-mentioned territory on that income computed
in accordance with its taxation laws and regulations.
3. For the purposes of this Section, profits, income or gains of
a resident of a territory that may be taxed in the other
territory in accordance with this Arrangement will be deemed
to arise from sources in that other territory.

V. SPECIAL PROVISIONS
SECTION 23
Non-Discrimination
1. The taxation on a permanent establishment which an enterprise
of a territory has in the other territory will not be less
favourably levied in that other territory than the taxation
levied on enterprises of that other territory carrying on the
same activities.
2. Nothing in this Section will be construed as obliging the
government of a territory to grant to residents of the other
territory any personal allowances, reliefs and reductions for
taxation purposes on account of civil status or family
responsibilities which it grants to its own residents.
3. Enterprises of a territory, the capital of which is wholly or
partly owned or controlled, directly or indirectly, by one or
more residents of the other territory, will not be subjected
in the first-mentioned territory to any taxation or any
requirement connected therewith which is more burdensome than
the taxation and connected requirements to which other
similar enterprises which are residents of the
first-mentioned territory, the capital of which is wholly or
partly owned or controlled, directly or indirectly, by one or
more persons which are residents of neither territories, are
or may be subjected.
4. In this Section, the term “ taxation ” means taxes that are
the subject of this Arrangement.

SECTION 24
Mutual Agreement Procedure
1. Where a person considers that the actions of one or both of
the governments of the territories result or will result for
that person in taxation not in accordance with the provisions
of this Arrangement, that person may, irrespective of the
remedies provided by the domestic law of those territories,
address to the competent authority of the territory of which
that person is a resident an application in writing stating
the grounds for claiming the revision of such taxation. To be
admissible, the said application must be submitted within
three years from the first notification of the action
resulting in taxation not in accordance with the provisions
of the Arrangement.
2. The competent authority referred to in paragraph 1 will
endeavour, if the objection appears to it to be justified and
if it is not itself able to arrive at a satisfactory
solution, to resolve the case by mutual agreement with the
competent authority of the other territory, with a view to
the avoidance of taxation not in accordance with the
Arrangement. Any agreement reached will be implemented
notwithstanding any time limits in the domestic law of the
territories.
3. The government of a territory will not, after the expiry of
the time limits provided in its domestic laws and, in any
case, after eight years from the end of the taxable period to
which the income concerned was attributed, increase the tax
base of a resident of either of the territories by including
therein items of income that have also been included in
income in the other territory. This paragraph will not apply
in the case of fraud or wilful default.
4. The competent authorities of the territories will endeavour
to resolve by mutual agreement any difficulties or doubts
arising as to the interpretation or application of the
Arrangement.
5. The competent authorities of the territories may consult
together for the elimination of double taxation in cases not
provided for in the Arrangement and may communicate with each
other directly for the purpose of applying the Arrangement.

SECTION 25
Exchange of Information
1. The competent authorities of the territories will exchange
such information as is foreseeably relevant for carrying out
the provisions of this Arrangement or to the administration
or enforcement of the domestic laws of the territories
concerning taxes covered by this Arrangement, insofar as the
taxation thereunder is not contrary to this Arrangement. The
exchange of information is not restricted by Section 1.
2. Any information received under paragraph 1 by the government
of a territory will be treated as secret in the same manner
as information obtained under the domestic laws of that
territory and will be disclosed only to persons or
authorities (including courts and administrative bodies)
concerned with the assessment or collection of, the
enforcement in respect of, the determination of appeals in
relation to taxes, or the oversight of the above. Such
persons or authorities will use the information only for such
purposes. They may disclose the information in public court
proceedings or in judicial decisions.
3. In no case will the provisions of paragraphs 1 and 2 be
construed so as to impose on the government of a territory
the obligation:
(a) to carry out administrative measures at variance with the
laws and administrative practice of that or of the other
territory;
(b) to supply information that is not obtainable under the laws
or in the normal course of the administration of that or of
the other territory; or
(c) to supply information that would disclose any trade,
business, industrial, commercial or professional secret or
trade process, or information, the disclosure of which would
be contrary to public policy (ordre public).
4. If information is requested by the government of a territory
in accordance with this Section, the government of the other
territory will use its information gathering measures to
obtain the requested information, even though that other
territory may not need such information for its own tax
purposes. The obligation contained in the preceding sentence
is subject to the limitations of paragraph 3 but in no case
will such limitations be construed to permit a territory to
decline to supply information solely because it has no
domestic interest in such information.
5. In no case will the provisions of paragraph 3 be construed to
permit the government of a territory to decline to supply
information solely because the information is held by a bank,
other financial institution, nominee or person acting in an
agency or fiduciary capacity or because the information
relates to ownership interests in a person.

SECTION 26
Miscellaneous Rules
1. The provisions of this Arrangement will not be construed to
restrict in any manner any exemption, allowance, credit or
other deduction accorded by the laws of a territory in the
determination of the tax imposed by the government of that
territory.
2. Nothing in this Arrangement will be construed as preventing
the government of a territory from imposing a tax on amounts
included in the income of a resident of that territory with
respect to a partnership, trust, company, or other entity in
which that resident has an interest.
3. The Arrangement will not apply to any company, trust or other
entity that is a resident of a territory and is beneficially
owned or controlled, directly or indirectly, by one or more
persons who are not residents of that territory, if the
amount of the tax imposed on the income of the company, trust
or other entity by the government of that territory is
substantially lower than the amount that would be imposed by
the government of that territory (after taking into account
any reduction or offset of the amount of tax in any manner,
including a refund, reimbursement, contribution, credit, or
allowance to the company, trust or partnership, or to any
other person) if all of the shares of the capital stock of
the company or all of the interests in the trust or other
entity, as the case may be, were beneficially owned by one or
more individuals who were residents of that territory.
4. For the purposes of paragraph 3 of Article XXII
(Consultation) of the General Agreement on Trade in Services,
the governments of the territories agree that,
notwithstanding that paragraph, any dispute between them as
to whether a measure falls within the scope of this
Arrangement may be brought before the Council for Trade in
Services, as provided by that paragraph, only with the
consent of the governments of both territories. Any doubt as
to the interpretation of this paragraph will be resolved
under paragraph 4 of Section 24 or, failing agreement under
that procedure, pursuant to any other procedure agreed to by
the governments of both territories.
5. Where under any provision of the Arrangement any income is
relieved from tax in a territory and, under the law in force
in the other territory a person, in respect of that income,
is subject to tax by reference to the amount thereof that is
remitted to or received in that other territory and not by
reference to the full amount thereof, then the relief to be
allowed under this Arrangement in the first-mentioned
territory will apply only to so much of the income as is
taxed in the other territory.

VI. FINAL PROVISIONS
SECTION 27
Entry into Effect
The Taipei Economic and Cultural Office in Canada and the
Canadian Trade Office in Taipei will notify each other in
writing of the completion of the procedures required in their
respective territories for the coming into effect of this
Arrangement. The provisions of this Arrangement will have
effect:
(a) in the territory in which the income tax law administered by
the Canada Revenue Agency is applied:
(i) in respect of tax withheld at the source on amounts paid or
credited to non-residents on or after the first day of
January in the calendar year following that which includes
the date of the later notification; and
(ii) in respect of other tax, for taxation years beginning on or
after the first day of January in the calendar year
following that which includes the date of the later
notification; and
(b) in the territory in which the taxation law administered by
the Taxation Administration, Ministry of Finance, Taiwan is
applied:
(i) in respect of tax withheld at the source on amounts paid or
payable to non-residents on or after the first day of
January in the calendar year following that which includes
the date of the later notification; and
(ii) in respect of other tax, for taxation years beginning on or
after the first day of January in the calendar year
following that which includes the date of the later
notification;
(c) in respect of Section 25 for information that relates to
taxation years beginning on or after the first day of
January in the calendar year following that which includes
the date of the later notification.

SECTION 28
Termination
This Arrangement will continue to have effect indefinitely but
either the Taipei Economic and Cultural Office in Canada or the
Canadian Trade Office in Taipei may, on or before 30 June of any
calendar year following the year which includes the date of the
later notification referred to in Section 27, give to the other
Office a notice of termination in writing. In such event, the
Arrangement will cease to have effect:
(a) in the territory in which the income tax law administered by
the Canada Revenue Agency is applied:
(i) in respect of tax withheld at the source on amounts paid or
credited to non-residents, after the end of that calendar
year; and
(ii) in respect of other tax, for taxation years beginning after
the end of that calendar year; and
(b) in the territory in which the taxation law administered by
the Taxation Administration, Ministry of Finance, Taiwan is
applied:
(i) in respect of tax withheld at the source on amounts paid or
payable to non-residents, after the end of that calendar
year; and
(ii) in respect of other tax, for taxation years beginning after
the end of that calendar year.


SIGNED in duplicate at Ottawa, on this 13th day of January 2016,
and at Taipei, on this 15th day of January 2016, in the Chinese,
English and French languages, each version being equally valid.


FOR THE TAIPEI ECONOMIC AND FOR THE CANADIAN TRADE
CULTURAL OFFICE IN CANADA OFFICE IN TAIPEI
_________________________ _________________________
Rong-chuan Wu Mario Ste-Marie
Representative Executive Director


PROTOCOL OF UNDERSTANDING
At the time of signing of this Arrangement between the Taipei
Economic and Cultural Office in Canada and the Canadian Trade
Office in Taipei for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income,
the undersigned have agreed upon the following provisions which
will be an integral part of the Arrangement. It is understood
that:
1. With reference to paragraph 1 of Section 4, the term “
instrumentality ” means any entity created or organized by
the authority administering either territory or a subdivision
thereof in order to carry out functions of a governmental
nature.
2. With reference to paragraph 4 of Section 13, for greater
certainty, the term “ the value of which is derived ” means
whether such value is derived directly or indirectly.
3. With reference to paragraph 4 of Section 13, “ principally
” means more than 50 per cent.
4. With reference to paragraph 6 of Section 13, it is understood
that the determination of the gain that accrued in a
territory while an individual was a resident of that
territory in respect of a property will be made by reference
to the lesser of the fair market value of the property at the
time that the individual ceased to be a resident of that
territory or the proceeds of disposition realized at the time
of the actual alienation of the property.
5. With reference to paragraph 1 of Section 14, where income
derived by a resident of a territory in respect of
professional services or other activities of an independent
character may be taxed in the other territory, there will be
allowed as deductions expenses which are incurred for the
purposes of performing such services in determining taxable
income.
6. With reference to Section 25, it is understood that its
provisions do not require the territories to exchange
information on an automatic or a spontaneous basis.


SIGNED in duplicate at Ottawa, on this 13th day of January 2016,
and at Taipei, on this 15th day of January 2016, in the Chinese,
English and French languages, each version being equally valid.


FOR THE TAIPEI ECONOMIC AND FOR THE CANADIAN TRADE
CULTURAL OFFICE IN CANADA OFFICE IN TAIPEI
_________________________ _________________________
Rong-chuan Wu Mario Ste-Marie
Representative Executive Director