On April 8, 2025, the Taiwan’s Ministry of Finance (MOF) amended article 34 of the “Regulations Governing the Application of Agreements for the Avoidance of Double Taxation with Respect to Taxes on Income” (hereafter, “Regulations”). The revision extends the period during which nonresident taxpayers may apply for benefits under the relevant income tax agreement – from 5 to 10 years following the tax payment date.  

Revising Article 34 for consistency among stakeholders 

Previously, residents of Contracting States (countries with a tax agreement with Taiwan) had five years from the date of tax payment to request treaty benefits. If the tax authorities determined that the tax liability under the applicable agreement was lower than the amount paid, the excess would be refunded. In response to recent amendments to domestic tax rules – most notably the 2021 revision to Article 28 of the Tax Collection Act, which extended the application period for tax refund claims to 10 years for domestic taxpayers – the MOF revised Article 34 to reflect similar treatment for nonresident taxpayers. The aim is to ensure consistency across tax regimes and respond to stakeholder calls for a harmonized timeframe. 

Key Features of the Amendment 

The amendment introduces three primary changes: 

1. Extension of the application period for foreign taxpayers from 5 to 10 years; 

2. Confirmation of refund eligibility where tax paid exceeds treaty-based liability; 

3. Alignment with broader regulatory changes and stakeholder expectations for uniformity in tax treatment. 

Equal Treatment for Foreign and Domestic Taxpayers 

With this amendment, foreign taxpayers now benefit from the same 10-year application window already available to domestic taxpayers for reclaiming overpaid taxes, including withholding tax. This shift enhances access to treaty relief mechanisms and promotes equitable tax administration. However, Paragraph 5 of the revised Article 34 reiterates that, where treaty provisions differ from those in the Regulations, the terms of the treaty take precedence. 

Transitional Rule and Effective Date 

Paragraph 3 outlines a transitional rule: the extended 10-year period does not apply retroactively. According to Article 13 of the Central Regulations Standard Act and Article 44 of the Regulations, the amendment takes effect on April 10, 2025 – three days after promulgation. As such, claims involving tax payments made more than five years before this date remain ineligible under the new timeline. 

Policy Objectives 

The MOF emphasized that the amendment seeks to align the Regulations with evolving international standards, improve transparency, and support a more investment-friendly tax environment. The changes reflect Taiwan’s ongoing commitment to protecting taxpayer rights, maintaining fairness, and enhancing the practical benefits of its tax treaty network.