On 21 October 2016, Poland and Taiwan signed a special double taxation agreement (“the agreement”). Since this is not diplomatic relations between Poland and Taiwan, the agreement was officially concluded between the Warsaw Trade Office in Taipei and the Taipei Economic and Cultural Office in Warsaw. Unlike the current OECD model convention, the agreement provides rules for independent personal services. As of December 31, 2017, the comprehensive income tax agreements that have been signed but have not yet come into force are listed below: Taiwan uses the credit method to avoid double taxation of income. Foreign taxes paid on income from foreign sources can be credited with all of Taiwan`s income tax debt. However, the credit is limited to additional taxes resulting from income from foreign sources. With respect to capital gains, the agreement contains a clause relating to a wealth corporation which provides that the profits generated by the disposal of shares directly or indirectly derived from more than 50% of their value of real estate located in the other territory may be taxed in that other region. Both contractual areas apply a regular credit as a means of avoiding double taxation of income. The agreement also contains a specific forecast for the limitation of benefits. Section 26 (limitation of the tax reduction) provides that the tax reductions or exemptions provided by the agreement are not granted to a resident of a contracting party if the exercise of the activities of that resident or a person related to that resident had the main purpose or one of the main purposes to obtain the usefulness of the agreement. Under the agreement, withholding tax on cross-border dividends and interest payments are limited to 10% of gross amounts, while withholding tax on cross-border royalties is limited to 3% for royalties paid in return for use or right to use, commercial, commercial or scientific equipment and 10% of gross royalties in all other cases.
As of December 31, 2017, 32 comprehensive personal income tax agreements and 13 international transportation income tax conventions have been signed and entered into force. All tax treaties are listed below: the agreement follows the OECD model convention with a number of important exemptions. With regard to the description of the taxes recorded, the agreement covers taxes in the area of application of tax legislation managed by the Polish Ministry of Finance and on taxes in the area where the tax legislation managed by the Ministry of Finance, namely Taiwan, applies. The same references are used for the definition of “territory” and are respected throughout the agreement. The definition of establishment is the standard language of the OECD agreement, provided that the construction, construction or installation project is only a stable facility if it lasts more than 12 months. The agreement provides that a stable establishment is considered constituted when a company provides services to the other party within 12 months through workers or other staff hired for a period or period covering more than 183 days. On 15 December 2016, the Polish parliament adopted a specific law on principles aimed at avoiding double taxation of income between the two aforementioned regions, which enabled the effective implementation of the agreement. As a result, the agreement came into effect on January 1, 2017 and applies to income collected on or after that date.