On 25 August 2015, mainland China and Taiwan signed a double tax agreement ("the Agreement") which will enter into force after the completion of the ratification procedures by both contracting parties and will apply to income derived on or after 1 January of the year following its entry into force.

The key changes introduced by the Agreement include a reduction in withholding tax for dividends if a corporate shareholder holds 25 percent or more voting rights; a reduction in withholding tax for interest and royalties; a capital gains tax exemption; a definition of permanent establishment with exceptions; and personal income tax relief for individuals who are present in the other jurisdiction for less than 183 days.

According to China's State Administration of Taxes, the Agreement is intended to "prevent and eliminate the double taxation of cross-strait business and trade exchange, reduce the tax burden of companies and individuals and prompt mutual cross-strait direct investment."