Where a resident of the other Contracting State derives dividends, interests, royalties or technical fees from ROC sources and has no PE or fixed base in the territory of the ROC, or has a PE or fixed base in the territory of the ROC but the relevant shares, debt-claims or rights are not effectively connected with such PE or fixed base, the tax withholder of such income may withhold the tax according to the limited tax rate stipulated in the relevant provisions of the DTA. In such a case, the dividends, interests, royalties or technical fees shall not be included in the business profit of the PE located in the territory of the ROC or in the income from professional services of the fixed base located in the territory of the ROC.
A resident of the other Contracting State who is entitled to the application of the limited tax rate as referred to in the preceding paragraph shall submit the Resident Certificate issued by the tax authority of the other Contracting State and documents identifying him or her as the beneficial owner of such income, and hand them over to the tax withholder for the handling of withholding matters. The tax withholder shall state the provisions of the applicable DTA, present the aforementioned documents provided by the said income recipient, as well as copies of relevant documents pertaining to the calculation of income while filing the withholding tax statement with the tax collection authority-in-charge.
A resident of the other Contracting State who derives interests and is entitled to the exemption in accordance with the provisions for interest under the DTA, may submit the Resident Certificate issued by the tax authority of the other Contracting State, relevant documents pertaining to the calculation of income and relevant documents corresponding to the relevant provisions of the DTA, and apply to the tax collection authority-in-charge where the payer of such income is located for approval. Where the income is subject to withholding tax under Article 88 of the Income Tax Act, the tax collection authority-in-charge shall, when issuing the approval, simultaneously notify the tax withholder of the exemption from the withholding tax.
The limited tax rate referred to in the preceding two paragraphs means the tax charge to a resident of the other Contracting State who derives interests, royalties or technical fees shall not exceed the specific ratio of the gross amount of such income in accordance with the provisions of the DTA. As for dividends, the withholding tax payable as stipulated in Article 73-2 of the Income Tax Act shall not exceed the specific ratio of the gross amount of the dividends in accordance with the provisions of the DTA.
The required documents pertaining to the calculation of income mentioned in the provisions of Paragraphs 2 and 3 include: with respect to interests, loan contracts or deposit records, interests statements or notices, etc.; with respect to dividends, share certificates or beneficiary receipts, dividends distribution calculation statements or notices, etc.; with respect to royalties or technical fees, licensing or technical service contracts (including a copy of the Chinese text), calculation statements of royalties or technical fees due, etc.
Except in the case where the relevant provisions of the DTA or the stipulations of the Ministry of Finance provide that a fund, trust or trustee shall be deemed to be the beneficial owner of dividends or interest, a foreign institutional investor of the other Contracting State which invests in domestic securities with the status of a fund, or not with the status of a fund but by the means of concluding contracts of order trading, discretionary account trading, or trust with residents of the other Contracting State and derives dividends or interest from ROC sources shall prepare the following documents and hand them over to the tax withholder for the handling of withholding matters:
1. A list of beneficiaries at any time point between the date of 31st December of the preceding year in which the income is incurred and the date on which the income is incurred. The content of the list of beneficiaries shall include the names, personal ID numbers or tax registration numbers, and addresses of beneficiaries, the number of units which are held by each beneficiary or the proportion of the beneficial rights to which each of the beneficiaries is entitled.
2. The Resident Certificate issued by the tax authority of the other Contracting State which demonstrates that each beneficiary named on the list of beneficiaries is a resident of the other Contracting State. The above mentioned Certificate may be replaced by a Resident Certificate issued by the tax authority of the other Contracting State which demonstrates the proportion of the units of the fund or trust which are held by the residents of the other Contracting State or the proportion of the beneficial rights of the fund or trust to which the residents of the other Contracting State are entitled. In the case where the other Contracting State only issues a Resident Certificate of the foreign institutional investor without the aforementioned information, the following documents shall be submitted as well:
(1) Statement issued by the foreign institutional investor: the content of the statement shall include the proportion of the units of the fund or trust which are held by the residents of the other Contracting State or the proportion of the beneficial rights of the fund or trust to which the residents of the other Contracting State are entitled. Such statement shall be attested by a Taiwanese embassy or consulate in the other Contracting State, or attested by a court or a government authority or verified by a notary of the other Contracting State.
(2) Prospectuses for public offerings or prospectuses of investing schemes.