The Cabinet passed a draft amendment to prevent the double taxation of maritime and aviation companies from Taiwan, Hong Kong and Macau, during a weekly meeting on Thursday.
The proposed amendment to the “Laws and Regulations Regarding Hong Kong and Macao Affairs” will lay the legal groundwork for reciprocal tax exemptions, which could help boost the competitiveness of Taiwanese companies, Premier Lin Chuan (林全) said.
The draft amendment will now be sent to the Legislature for approval, he said.
Under the amendment, Taiwan will not collect sales tax and income tax on income generated by Hong Kong and Macau maritime and aviation companies in Taiwan, and Hong Kong and Macau will do the same on income generated by Taiwanese maritime and aviation companies in those territories.
Chiu Chui-cheng (邱垂正), deputy head of the Mainland Affairs Council, said that many countries have double taxation avoidance agreements with Hong Kong and Macau, putting Taiwanese companies at a competitive disadvantage in those places because of the higher tax burden.
The proposed amendment — which will serve as the legal basis for mutual tax exemptions in the maritime and aviation sectors – will improve the international competitiveness of Taiwanese companies in those sectors and help Taiwan attract more foreign investment, Chiu said.
Source: Focus Taiwan News Channel