Taiwan’s Ministry of Finance has announced an extension to the application deadline for claiming tax treaty (agreement) benefits on 10 April 2025.

The Ministry of Finance promulgated the amendments to Article 34 of the “Regulations Governing the Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income” (hereinafter referred to as the Regulations) on 8 April 2025. The main amendment to the Regulations extends the application period for a resident of the other Contracting State (foreign taxpayer) to apply to Taiwan tax authorities for the benefits of the applicable income tax agreement, loosening the period from the original 5 years from the tax payment date to 10 years.

The Ministry of Finance stated that, under the previous version of Article 34 of the Regulations, a resident of the other Contracting State who derives income from Taiwan and has been taxed either through withholding tax or by filing a tax return and making tax payment in accordance with Taiwan’s domestic laws, may submit the required documents and apply to the tax authorities for the benefits of the applicable income tax agreement within 5 years from the tax payment date. If the tax authorities determine that the tax payable under the applicable income tax agreement provisions is less than the amount of tax paid, the difference will be refunded. Given that recent amendments to the income tax regulations have progressively extended the application period for recalculating income or tax payable to 10 years, and in response to expectations from various stakeholders to align the application period for foreign taxpayers applying for benefits under the income tax agreement with the application period of the relevant income tax regulations, the Ministry of Finance amended Article 34 of the Regulations.

The Ministry of Finance further explained that the amended Article consists of 5 paragraphs. Paragraphs 1 and 2 stipulate that the application period for foreign taxpayers subject to withholding tax or filing tax returns and making tax payment to request the applicable income tax agreement is extended to 10 years from the tax payment date. Paragraph 3 was added to set out the principle for cases falling within the transitional period resulting from the amendment of the provision. When the “amendment of the Article is enforced,” cases where the time period from the tax payment has already exceeded the 5-year period will not be eligible for the extended timeframe under the amended provisions. Paragraph 5 was added to reiterate that if the applicable income tax agreement provides otherwise, the provisions of the agreement shall apply.

The Ministry of Finance clarified the transitional period principle prescribed in Paragraph 3 of Article 34 of the Regulations mentioned above. According to Article 13 of the Central Regulations Standard Act and Article 44 of the Regulations, the amendment to Article 34 of the Regulations promulgated on 8 April 2025 will become effective on 10 April 2025 (the third day from the date of promulgation). This means that if a case has exceeded 5 years from the tax payment date by 10 April 2025, the extended 10-year period under the amended provision shall not apply.

The Ministry of Finance stated that the amendment to the Regulations aims to ensure overall consistency with the relevant regulations and respond to the expectations of various stakeholders. Loosening the application period is expected to provide a greater accessibility to Taiwan’s income tax agreements, thereby creating a more favorable tax environment for investment and trade. The Ministry of Finance will continue to focus on the development of international taxation trends and topics concerning the protection of taxpayer rights in order to maintain tax fairness, safeguard taxpayer rights, and enhance the overall benefits provided by income tax agreements.