The enterprise of the other Contracting State, whose PE within the territory of the ROC does not conform to the regulation of a fixed place of business or a business agent set out in Article 10 of the Income Tax Act, shall pay the profit-seeking enterprise income tax in accordance with the following provisions:
1. When the enterprise receives the income subject to withholding tax under Article 88 of Income Tax Act, the tax withholder shall withhold the tax payable at the time of payment according to the prescribed tax rates and withholding procedures. Such enterprise may appoint an individual residing in the territory of the ROC or a profit-seeking enterprise having a fixed place of business within the territory of the ROC as an agent in charge of filing a tax return and make tax payment. Such agent may apply to the tax collection authority-in-charge where the payer of such income is located for the deduction of relevant costs and expenses for the enterprise while filing the tax return. In such case, the amount of the tax withheld at the time of payment shall be deducted from the amount of income tax payable in accordance with the provisions of the Income Tax Act.
2. When the enterprise receives income which is not subject to withholding tax under Article 88 of the Income Tax Act, it may appoint an individual residing in the territory of the ROC or a profit-seeking enterprise having a fixed place of business within the territory of the ROC as an agent in charge of filing of a tax return and make tax payment. That agent may apply to the tax collection authority-in-charge where the agent is located for the deduction of relevant costs and expenses while filing the tax return.
3. The person who applies for the deduction of relevant costs and expenses referred to in the preceding two paragraphs shall prepare relevant accounting books and records, reports certified by a certified public accountant, and transfer pricing documentation, and make them available for inspection by the tax collection authority-in-charge.