According to Manila Economic and Cultural Office (MECO) chairman and chief executive officer Antonio Basilio, the Philippines and Taiwan are set to sign an agreement on the elimination of double taxation on Wednesday, May 29.
Under the tax agreement, Filipino and Taiwanese businessmen who do business in either of the two countries will only have to pay taxes where the business is based.
The same tax agreement will also apply to Filipino and Taiwanese workers.
"In the past, businessmen had to pay a 30- percent tax here and were further subjected to another 50-percent tax in Taiwan," Basilio said.
Under the tax agreement, a businessman who pay a 30-percent tax here in the Philippines will have to pay an additional 20 percent in Taiwan.
With the resolution of the double taxation issue, Basilio said, "the agreement will encourage more Taiwanese businessmen to invest in the Philippines."
"Whatever taxes Taiwanese businessmen pay in the Philippines will also be credited in Taiwan," he added.
MECO is expecting some $1 billion in foreign direct investments from Taiwan over the next three years.
The signing of the tax accord will coincide with the latest Philippine promotion program of Far Eastern Department Store (FEDS), one of Taiwan’s major retail chains.
FEDS sells locally-made products such as furniture, decor and other items.