Australian Tax Treaties

Taipei Agreement  

AGREEMENT BETWEEN THE AUSTRALIAN COMMERCE AND INDUSTRY OFFICE AND THE TAIPEI ECONOMIC AND CULTURAL OFFICE CONCERNING THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME  

ARTICLE 10   Dividends  

1.    
Dividends paid by a company which is a resident of a territory for the purposes of its tax, being dividends to which a resident of the other territory is beneficially entitled, may be taxed in that other territory.

2.    
However, those dividends may also be taxed in the territory of which the company paying the dividends is a resident for the purposes of its tax, and according to the law of that territory, but the tax so charged shall not exceed:

(a) in the territory in which the taxation law administered by the Australian Taxation Office is applied:

(i) 10 per cent of the gross amount of the dividends, to the extent to which the dividends have been fully " franked " in accordance with the federal law of that territory relating to its income tax; and

(ii) 15 per cent of the gross amount of the dividends in all other cases; and

(b) in the territory in which the taxation law administered by the Department of Taxation, Ministry of Finance, Taipei is applied:

(i) 10 per cent of the gross amount of the dividends, where the dividends are paid to a company (other than a partnership) which holds directly at least 25 per cent of the capital of the company paying the dividends; and

(ii) 15 per cent of the gross amount of the dividends in all other cases,

provided that if the relevant law in either territory at the date of signature of this Agreement is varied, otherwise than in minor respects so as to not affect its general character, the parties to this Agreement shall consult each other with a view to facilitating any amendment of this paragraph as may be appropriate.

3.    
The term " dividends " in this Article means income from shares and other income assimilated to income from shares by the law, relating to tax, of the territory of which the company making the distribution is a resident for the purposes of its tax.

4.    
The provisions of paragraphs 1 and 2 shall not apply if the person beneficially entitled to 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 in that other territory, or performs in that other territory independent personal services from a fixed base situated in that other territory, and the holding in respect of which the dividends are paid is effectively connected with that permanent establishment or fixed base. In that case the provisions of Article 7 or Article 14, as the case may be, shall apply.

5.    
Dividends paid by a company which is a resident of a territory, being dividends to which a person who is not a resident of the other territory is beneficially entitled, shall be exempt from tax in that other territory except 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. This paragraph shall not apply in relation to dividends paid by any company which is a resident of the territory in which the taxation law administered by the Australian Taxation Office is applied for the purposes of tax imposed by that territory and which is also a resident of the territory in which the taxation law administered by the Department of Taxation, Ministry of Finance, Taipei is applied for the purposes of tax imposed by that territory.