Taiwan Permanent Establishment

Both OECD and UN Double Taxation Agreements models, which are the basis for Permanent Establishment rules in international taxation, were taken into consideration when the taiwanes drafted the ITA and negotiated and concluded agreements with other
countries. However, in order to broaden the tax basis for taxation, the Taiwaness
tax authority tends to adopt UN models when negotiating with developed
countries. In addition, there are similar concepts of the PE in domestic laws such
as the Value-Added and Non-Value-Added Act and guidance for the application
of Double Tax Agreements.

If no Double Taxation Agreements entered into between Taiwan and other foreign countries is to be applied, the tax authority and taxpayer must look to domestic laws, regulations or Minister of Finance rulings for guidelines.

Currently, Taiwan has 16 comprehensive agreements with Australia, Belgium, Denmark, Singapore, South Africa, Swaziland, Sweden, Vietnam, Gambia, Indonesia, Macedonia, Malaysia, the Netherlands, New Zealand, Senegal, and the UK. Although Taiwan is not an OECD member, some of the concepts of the Permanent Establishment in these agreements are similar to, or of the same nature as, those in the OECD model or UN model.

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