Statute of Limitation for Applying Income Tax Treaties Extended from 5 Years to 10 Years!
The National Taxation Bureau of Northern Area, Ministry of Finance (MOF) stated that the MOF has promulgated amendments to Article 34 of the Regulations Governing Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income (hereinafter referred to as the “Regulations”). Effective from April 10, 2025, the application period for residents of the other contracting countries (foreign taxpayers) to apply to Taiwan Tax Authorities for the application of an income tax treaty has been extended from five (5) years to ten (10) years from the date of tax payment.
The Bureau further explained that, under the amended provisions, foreign taxpayers may apply for treaty benefits no later than ten (10) years from the date the tax was paid. However, pursuant to the transitional rules stipulated in the amended Regulations, if more than five (5) years had already elapsed between the tax payment date and the effective date of the amendment (i.e., April 10, 2025), the amended ten-year application period shall not apply.
For example, if Company A in Taiwan paid service fees to overseas Company B and remitted the withholding tax on April 15, 2020, under the regulations prior to amendment, Company B’s application period for a tax refund would have been five years, with the last application date being April 14, 2025. As of the effective date of the amended Regulations (April 10, 2025), five years had not yet elapsed; therefore, Company B may apply the extended ten-year application period under the amended rules.
The Bureau specifically reminded taxpayers that, in addition to extending the application period for applying income tax treaties to ten years and introducing transitional rules, the amended Article 34 also stipulates that where an income tax treaty provides otherwise, the treaty provisions shall prevail. For example, Article 26, Paragraph 2 of the tax treaty between Taiwan and Germany provides that applications for tax refunds must be filed by the end of the fourth year following the calendar year in which withholding tax on dividends, interest, royalties, or other income was applied. Accordingly, German residents must submit their treaty applications within the time limit specified in the treaty and are not eligible for the extended ten-year application period under the amended Regulations.
If there are any questions, taxpayers are welcome to contact the free service hotline at 0800-000-321, we are willing to provide detailed consultation services.
(Contact person: Chief Hua, Business Income Tax Division; Tel: +886-3-339-6789 ext. 1360)
Issuing Authority: National Taxation Bureau of Northern Area, Ministry of Finance
Date of Release: June 12, 2025
Date of Update: June 12, 2025
Translated by inFINIty Consulting Inc.
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