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9. FOREIGN TAX CREDITS

Taiwan provides for foreign tax relief via unilateral provisions and through double taxation agreements (DTA's) with foreign jurisdictions.

Unilateral Relief

Foreign taxes paid on foreign sourced income may be credited against an enterprise’s Taiwan corporate income tax liability. However, the credit is limited to the amount of Taiwan corporate income tax that would normally be applied to the taxable foreign sourced income.

For any foreign tax credit sought, the enterprise must provide proof that the foreign tax was paid, such as a tax receipt, voucher, etc. issued by the tax authority of the foreign country in which the tax was paid, and attestation by the Taiwan diplomatic representative office or other approved organization in the foreign country.

Any unused credits may not be carried forward or back.

Relief under Tax Treaties

When foreign taxes are payable in a jurisdiction with which Taiwan has a DTA, relief for double taxation is regulated by the relevant agreement (generally the credit method).

Proof is required to show that the foreign tax has actually been paid.