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Canada and Taiwan have signed a double tax agreement (DTA) that will limit the withholding tax rates on income from dividends, interest, and royalties, and provide for the exchange of tax information.
The Canadian Finance Department announced that the agreement was signed on January 15, 2016, in Taipei.
Under the deal, the withholding tax rate for dividends will be capped at 15 percent. A ten percent rate will apply to dividends paid to a company that holds directly or indirectly at least 20 percent of the capital of the company that pays the dividends.
Payments of interest and royalties will be subject to a maximum withholding tax rate of ten percent. Certain payments of interest will be exempt.
The DTA also includes provisions for the exchange of tax information, based on the standard developed by the Organisation for Economic Cooperation and Development.
The Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada will notify each other of the completion of the two countries' respective domestic procedures, required to bring the DTA into force.
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