Canada-Taiwan Tax Agreement (in effect 1 January 2017)

An agreement between Taiwan and Canada to avoid double taxation is to be
implemented at the start of next year, the Ministry of Finance said on
Thursday. The agreement will help create a friendlier environment for
bilateral investment and cooperation, particularly in the areas of
technology, healthcare, “clean” energy, sustainable development and
services, the ministry said. Under the agreement, taxes cannot be levied
by both sides on the same assets, income or financial transactions.
“For Taiwanese businesspeople in Canada, as long as they do not have a
permanent residence there, Canada will not tax their operating profits
and they will pay 17 percent income tax in Taiwan,” the ministry said.
The withholding tax rate on dividends will be capped at 15 percent. A 10
percent rate will be levied on dividends paid to a company that holds
at least a 20 percent share, directly or indirectly, in the paying
company.

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Finally a tax treaty! As I understand the situation, once it’s in effect on January 1, 2017, it will cut the possibility of double taxation for Canadians in Taiwan.

Does any one know of a source from the Canadian government side providing details?

Guy

Here’s a summary with a link to the full text in English.

https://www.fin.gc.ca/treaties-conventions/notices/taiwan-eng.asp

The Chinese version doesn’t seem to have been added to law.moj.gov.tw yet.

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That’s very helpful–and good news for Canadian forumosans!

Guy

I wanted to bump this thread to again consult the wider forumosan community about this new tax agreement.

As Canadians in Taiwan will know, Canada taxes its residents on 100% of world wide income. The key to avoiding this unhappy situation is to sever residence ties to Canada.

My question for forumosans who are more legally literate than I am is this: how (if at all) does this new agreement change things for Canadians in Taiwan?

Any advice would be much appreciated!

Guy

EDITED FOR SPELLING

You make this

severe (sever) residence ties to Canada

Sound like it’s something drastic or complicated.
All it really means is “don’t live there”

It’s, what now, 90 days’ residency in Canada or something as the tipping over point?

The thing is, though, since, to the best of my knowledge, Customs and Immigration doesn’t really co-operate with Revenue Canada, a guy could theoretically bounce the residency requirement pretty easily, as long as he was able to live a footprint-free existence.
I mean, there’s nothing on record anywhere that acts as a standalone record of residency there, there can’t be.

Residential ties to Canada are not based on “living there” alone.

Bank accounts in Canada; owning property in Canada; holding health insurance; having a driver’s licence; having a spouse or dependents living in Canada–any or all of the these factors can be used by Revenue Canada to determine that someone is deemed to have residential ties to Canada. This is all old news.

My question is how (if at all) the new agreement now in place could make things easier for individuals like us in Taiwan.

Guy

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Sorry, a while ago I wasted an entire evening of my ever-shortening life attempting to get this drunk-ass Canooker FNG to understand that actual Ottawa doesn’t have a unique record of whether a citizen is Resident or otherwise.
I’ve been through all this before.

Yeah, that’s exactly my point. Technically:

Residential ties to Canada are not based on “living there” at all.

It sure is. That’s why I said:

…a guy could theoretically bounce the residency requirement pretty easily, as long as he was able to live a footprint-free existence.
I mean, there’s nothing on record anywhere that acts as a standalone record of residency there…

The point being that it’s theoretically possible for a dude to actually live there without flagging any of those parameters. Unlikely, sure, but certainly possible.

As for your question

My question is how (if at all) the new agreement now in place could make things easier for individuals like us in Taiwan.

What does “individuals like us” mean anyways?
There are loads of guys who have been here long enough that they might as well be dead, as far as any Canook-side presence is concerned.
And I’m sure there are plenty of them who don’t own property, bank, hold health insurance or a current driver’s license, or have any dependents there.
So the new agreement wouldn’t mean much to them, I guess.

I am referring to Canadians who have established residential ties to Taiwan.

Guy

What does that mean?

I mean technically, on paper.

The Taiwan government has this fancy thing called an “APRC.” That would be one example.

More broadly this could mean living in Taiwan, with an address in Taiwan, paying taxes as a resident of Taiwan, owning property in Taiwan, etc.

In other words, having demonstrable residential ties to Taiwan.

Guy

A big one, according to the CRA, is being covered by another country’s health insurance program.

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OK, now we’re talking, that’s something quantifiable.

Those two don’t mean anything.

Sure, I guess it’s possible to have residential ties to Taiwan–without having a Taiwan address. I’ll let you explain that one to Taiwan’s NIA. :face_with_raised_eyebrow:

Now please back on topic.

Guy

Also, realize, that if you want to be considered a non-resident or an emigrant of Canada you probably have to declare it. You just can’t stop filing taxes as that will make the CRA go WTF.

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/non-residents-canada.html

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If there’s no Canadian income, sure you can walk away.

But you have to file to show them that there’s no Canadian income.

The government relies on paperwork. You just can’t stop filing it one day.

The point the dog is making is that you can become (from the Canadian authority’s perspective) a deemed non-resident of Canada. This is basic and a key point for folks who may have perceived ties to Canada to keep the CRA at bay.

And “Canadian” or “non-Canadian” income is irrelevant here–both are taxable from the Canadian side if they perceive the individual to have residential ties to Canada.

All this is old news, not related to the topic of this thread.

Back on topic, please.

Guy

CRA judges residency on a case by case basis. If all you have are bank accounts, frozen investments, pensions etc., 99.9 percent of the time, after leaving Canada and gaining residency in another country (e.g., teaching Engrishy in Taiwan :joy:) you are a non-resident. You keep a car, house, active investments in Canada gaining interest etc., you will likely be deemed a resident. Very simple to determine actually.