China-Taiwan deal on double taxation dropped

The anticipated tax agreement was unexpectedly removed from the agenda at a preliminary meeting yesterday. Officials from both sides said the action was taken because of technical issues, without elaborating.

Sources said that the postponement on the tax issue could have been made mainly following a request from Taiwan's investors in China.

But officials at the Cabinet-level Mainland Affairs Council (MAC) said the agreement will still be inked after differences over certain issues are ironed out.

The timing for signing the tax pact can be set before the next round of talks, they said.

Vice Chairman Kao Koong-lian of the Taipei-based Straits Exchange Foundation (SEF) explained that it normally takes a couple of years to five years for Taiwan to conclude taxation agreements with other nations.

The taxation pact inked recently with Israel took four years of negotiations and discussions, he said.

Some analysts said they were not surprised by the shelving of the tax pact for now since it involves complicated factors related to accounting practice, tax payment, and legal affairs on both sides.

President Chen Yunlin of the Association for Relations Across the Taiwan Strait (ARATS) flew into Taichung yesterday to take part in the fourth round of cross-strait talks with SEF Chairman P.K. Chiang beginning today.

They will still sign the three agreements on fishing crew cooperation, agricultural and food quarantine inspection, and industrial product standards, inspection and certification.

The two are also expected to take the opportunity to exchange views on the signing of an economic cooperation framework agreement (ECFA) and a pact on protection of intellectual property rights (IPRs) between Taiwan and China.

Both issues will be discussed in the coming months with the possible signing of formal agreements in the fifth round of talks to be held in China next year.

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