The Double Taxation Relief (Taxes on Income)(Taiwan) Order 2002

Article 22 Elimination of double taxation

(1) Subject to the provisions of the law of the territory referred to in paragraph (3)(a) of Article 2 of this Agreement regarding the allowance as a credit against its tax of tax payable in another territory (which shall not affect the general principle hereof):

(a) Tax payable under the laws of the territory referred to in paragraph (3)(b) of Article 2 of this Agreement and in accordance with this Agreement, whether directly or by deduction, on profits, income or chargeable gains from sources within that territory (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against any tax payable under the laws of the territory referred to in paragraph (3)(a) of Article 2 of this Agreement computed by reference to the same profits, income or chargeable gains by reference to which the first mentioned tax is computed;

(b) in the case of a dividend paid by a company which is a resident of the territory referred to in paragraph (3)(b) of Article 2 of this Agreement to a company which is a resident of the territory referred to in paragraph (3)(a) of Article 2 of this Agreement and which controls directly or indirectly at least 10 per cent. of the voting power in the company paying the dividend, the credit shall take into account (in addition to any tax payable under the laws of the territory referred to in paragraph (3)(b) of Article 2 of this Agreement for which credit may be allowed under the provisions of sub-paragraph (a) of this paragraph) the tax payable under the laws of that territory by the company in respect of the profits out of which such dividend is paid.

(2) In the case of the territory referred to in paragraph (3)(b) of Article 2 of this Agreement, double taxation shall be avoided as follows:

• Tax payable under the laws of the territory referred to in paragraph (3) (a) of Article 2 of this Agreement and in accordance with this Agreement (excluding in the case of a dividend, tax payable in respect of the profits out of which the dividend is paid) shall be allowed as a credit against the tax payable under the laws of the territory referred to in paragraph (3) (b) of Article 2 of this Agreement. The amount of credit, however, shall not exceed the amount of the tax referred to in paragraph (3) (b) of Article 2 of this Agreement on that income computed in accordance with its tax laws.

(3) For the purposes of paragraph (1) of this Article, profits, income and capital gains owned by a resident of a territory which may be taxed in the other territory in accordance with this Agreement shall be deemed to arise from sources in that other territory.