Cross-strait tax talks in Shanghai end in agreement

Technical negotiations over an agreement to avoid double taxation by Taiwan and China have been completed, officials said on Thursday in Shanghai.

Finance officials from both sides of the Taiwan Strait expressed their hopes for an early signing of the pact during a seminar on a global campaign against tax dodging.

Ministry of Finance Director of International Finance Sung Hsiu-ling (宋秀玲) said the government has approved a total of US$222.8 billion in overseas investment over the past 20 years, of which 62 percent, or US$139.8 billion, had headed to China.

With such a huge investment, if Taiwan’s investors cannot enjoy some tax benefits and be protected under a tax agreement, they would “lose at the starting line,” she said.

China State Administration of Taxation Head of International Tax Liao Tizhong (廖體忠) agreed and said that Taiwanese investors have paid more tax to the Chinese government than those from the UK, Germany, Hong Kong or Macau.

“I sincerely hope a cross-strait tax agreement can be signed soon so that Taiwanese investors in China will not have to appeal to their legislature, and can enjoy tax reductions and exemptions,” Liao said.

Sung assured Taiwanese investors that they need not worry about their company information being “leaked” to authorities because under the agreement four restrictions are clearly defined.

The restrictions are: no provision of information about a specific tax case; no use of tax information for criminal charges; no use of tax information for other purposes; and no retroactive rules, Sung said.

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