cause competing taxation. If Taiwan has executed a tax treaty with the foreign
state, the enterprise still has to apply to be taxed only in the State of residence; if
without a tax treaty, the enterprise shall be subject to Taiwan income tax, which
may cause double taxation. For example, when the country of residence of the
foreign enterprises does not offer foreign tax credit for income taxes paid to
another country, or the foreign country's income tax rate is lower than the
withholding tax in Taiwan, it will create a situation that the same income is taxed
twice.
6.7.3
Internet transactions tax proposal to Taiwan
With the development of cloud technology, diversification of goods and services transactions
flexibly provided has become a trend. The directions for the taxation of Internet transactions
types and attributes are too streamlined and are not in synch with the international standards,
which caused confusions to the applicable enterprises. To enhance the tax system, it is
recommended that the tax authorities in Taiwan should re-examine the types of Internet
transactions for cloud services by referencing the existing world e-commerce taxation trend
to overcome the operational obstacles and avoid double taxation on cross-border online
transactions.
