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3 The term “ dividends ” as used in this Section means income from shares, “jouissance” shares or “jouissance” rights, mining shares, founders’ shares or other rights, not being debt-claims, participating in profits, as well as income which is subjected to the same taxation treatment as income from shares by the laws of the territory of which the company making the distribution is a resident.
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4 The provisions of paragraphs 1 and 2 will not apply if the beneficial owner of the dividends, being a resident of a territory, carries on business in the other territory of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other territory independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Section 7 or Section 14 will apply.
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6 Nothing in this Arrangement will be construed as preventing the government of a territory from imposing on the earnings of a company attributable to a permanent establishment in that territory, or the earnings attributable to the alienation of immovable property situated in that territory by a company carrying on a trade in immovable property, a tax in addition to the tax that would be chargeable on the earnings of a company that is a resident of that territory, except that any additional tax so imposed will not exceed 10 per cent of the amount of such earnings that have not been subjected to such additional tax in previous taxation years. For the purpose of this provision, the term “ earnings ” means the earnings attributable to the alienation of such immovable property situated in a territory as may be taxed by the government of that territory under the provisions of Section 6 or of paragraph 1 of Section 13, and the profits, including any gains, attributable to a permanent establishment in a territory in a year and previous years, after deducting therefrom all taxes, other than the additional tax referred to herein, imposed on such profits in that territory.
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7 A resident of a territory is not entitled to any benefits provided under this Section in respect of a dividend if one of the main purposes of any person concerned with the creation, assignment or transfer of the dividend, or with the creation, assignment, acquisition or transfer of the shares or other rights in respect of which the dividend is paid, or with the establishment, acquisition or maintenance of the person that is the beneficial owner of the dividend, is for that resident to obtain the benefits of this Section.
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4 The term “ interest ” as used in this Section means income from debt-claims of every kind, whether or not secured by mortgage, and in particular, income from government securities and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures, as well as income which is subjected to the same taxation treatment as income from money lent by the laws of the territory in which the income arises. However, the term “ interest ” does not include income dealt with in Section 10.
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5 The provisions of paragraphs 2 and 3 will not apply if the beneficial owner of the interest, being a resident of a territory, carries on business in the other territory in which the interest arises, through a permanent establishment situated therein, or performs in that other territory independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Section 7 or Section 14 will apply.
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7 Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount that would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Section will apply only to the last-mentioned amount. In such case, the excess part of the payments will remain taxable according to the laws of each territory, due regard being had to the other provisions of this Arrangement.
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8 A resident of a territory is not entitled to any benefits provided under this Section in respect of interest if one of the main purposes of any person concerned with the creation, assignment or transfer of the interest, or with the creation, assignment, acquisition or transfer of the debt-claim or other rights in respect of which the interest is paid, or with the establishment, acquisition or maintenance of the person that is the beneficial owner of the interest, is for that resident to obtain the benefits of this Section.
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3 The term “ royalties ” as used in this Section means payments of any kind received as a consideration for the use of, or the right to use, any copyright, patent, trade mark, design or model, plan, secret formula or process or computer software, or for the use of, or the right to use, industrial, commercial or scientific equipment, or for information concerning industrial, commercial or scientific experience, and includes payments of any kind in respect of motion picture films and works on film, videotape or other means of reproduction for use in connection with television. However, the term “ royalties ” does not include income dealt with in Section 8.
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4 The provisions of paragraph 2 will not apply if the beneficial owner of the royalties, being a resident of a territory, carries on business in the other territory in which the royalties arise, through a permanent establishment situated therein, or performs in that other territory independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Section 7 or Section 14 will apply.
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6 Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount that would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Section will apply only to the last-mentioned amount. In such case, the excess part of the payments will remain taxable according to the laws of each territory, due regard being had to the other provisions of this Arrangement.
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7 A resident of a territory is not entitled to any benefits provided under this Section in respect of a royalty if one of the main purposes of any person concerned with the creation, assignment or transfer of the royalty, or with the creation, assignment, acquisition or transfer of rights in respect of which the royalty is paid, or with the establishment, acquisition or maintenance of the person that is the beneficial owner of the royalty, is for that resident to obtain the benefits of this Section.
The Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada will notify each other in writing of the completion of the procedures required in their respective territories for the coming into effect of this Arrangement. The provisions of this Arrangement will have effect:
This Arrangement will continue to have effect indefinitely but either the Canadian Trade Office in Taipei or the Taipei Economic and Cultural Office in Canada may, on or before 30 June of any calendar year following the year which includes the date of the later notification referred to in Section 27, give to the other Office a notice of termination in writing. In such event, the Arrangement will cease to have effect:
