TRADE PACT SIEGE: Oversight bill could delay tax pact: minister

By Amy Su  /  Staff reporter

Thu, Apr 10, 2014 - Page 13

Minister of Finance Chang Sheng-ford (張盛和) yesterday voiced concern over delays in the signing of a cross-strait taxation agreement in view of the protests against the service trade pact with China.

“The recent controversy [over the service trade pact] will undoubtedly affect the progress of the taxation pact with China,” Chang told reporters on the sidelines of a question-and-answer session at the legislature’s Finance Committee.

Following the government’s decision to launch a new bill establishing an oversight mechanism for bilateral agreements with China, progress on all cross-strait agreements — including the taxation and service trade pacts — has halted, Chang said.

Negotiations on the tax agreement have reached the third of four stages of talks, but further progress will have to be determined by when the legislature passes the oversight bill, he said.

Nonetheless, Chang expressed optimism, saying that the content of the taxation agreement is relatively straightforward compared with that of the service trade pact.

The taxation agreement calls on Taipei and Beijing to share taxation information to avoid double taxation and ease the tax burden on both sides.

The information cannot be used in any other cases, with both sides reserving the right to decide whether to give the information, he added.

In related news, Financial Supervisory Commission (FSC) Chairman William Tseng (曾銘宗) yesterday said that Taiwan should reach a consensus with the US on the execution of the Foreign Account Tax Compliance Act (FATCA) before the end of next month.

Since enacting the FATCA in 2010, the US has asked foreign financial institutions to report US offshore accounts worth more than US$50,000 to the to the US Internal Revenue Service, or be taxed 30 percent of their investments in the US, when the act takes effect in July.

Tseng said that financial institutions in Taiwan need not worry about the issue, as the two nations should reach a consensus before the end of next month at the latest, under the model of an intergovernmental agreement.

Meanwhile, the Taiwan Stock Exchange is scheduled to launch a new index covering 100 listed companies that are raising employee pay before the end of August in order to encourage more companies to increase wages and boost their corporate image.

The constituent stocks in the new index will be updated every year, with the exchange releasing the names of the companies being added in or removed, he said.