Fri, Dec 11, 2009 page12

• Cross-strait tax pact will benefit Taiwan: Lee

  • STAFF WRITER, WITH CNA
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  A proposed taxation agreement with China expected to be signed during the fourth round of cross-strait talks this month will protect Taiwanese businesspeople operating in China, lower the burden on taxpayers and increase the government’s tax revenues in the long term, Minister of Finance Lee Sush-der (李述德) said yesterday.

  Lee also gave assurances that information on individuals and companies would not be divulged during tax information exchanges between the two sides, in line with international tax treaty protocols. Such information would only be supplied when there was a specific need, such as cases of major tax evasion, he said.

  He made the remarks at a session at the Legislative Yuan as legislators voiced concern that the taxation agreement might help Beijing obtain more financial information about Taiwanese businesspeople working in China, which could affect their operations in that country.

  

  Protesters in a demonstration organized by farmers and manufacturers outside the Legislative Yuan wear masks with the words “survival,” “unemployment,” and “human rights” written on them. The protesters demanded that negotiations on the signing of an economic pact with China be discontinued and that the government focus on unemployment rather than the interests of big business.

  PHOTO: LO PEI-DER, TAIPEI TIMES

  Lee said the proposed agreement closely follows guidelines set out by the Organization for Economic Cooperation and Development (OECD) and the UN in their model tax convention documents. Taiwan has signed similar tax treaties with 16 other countries.

  Of those 16 countries, there have been only eight cases of tax information exchange — all of them related to cases of tax evasion or avoidance — in the past five years, Lee said, adding that four of the cases had been initiated by Taiwan.

  He also said it would be impossible for either side to send officials across the Taiwan Strait to conduct tax inspections.

  The taxation agreement would cover issues such as the taxation rights of each government, the avoidance of double taxation and mutual assistance on taxation matters. The two sides have reached consensus on most of the contents of the agreement in recent talks, including tax allocation and exchange of tax information.

  President Ma Ying-jeou (馬英九) has said that all cross-strait agreements, including taxation, must be open and transparent, and must be reviewed and approved by the legislature.

  Lee said that without the taxation agreement, the two sides could hide their income from each other, causing a lot of unfairness, and that the agreement would help improve information transparency and better protect Taiwanese businesspeople.

  The agreement could also help attract more Chinese investment, which would boost the government’s tax revenues, Lee said.

  The agreement would ensure that Taiwanese workers who stay for less than 183 days per year in China would only have to pay taxes on the salaries they receive in China to the Chinese government and not in Taiwan. There are about 1 million Taiwanese working in China.
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