Washington DC [US]: The US House of Representatives passed the United States-Taiwan Expedited Double-Tax Relief Act on January 15 by an overwhelming 423-1 vote. The bill aims to reduce tax burdens, prevent double taxation, and offer tax exemptions for Taiwanese businesses, residents, and employees in the United States, according to Central News Agency Taiwan.
The legislation will now proceed to the US Senate for a vote. If approved, it will be sent to the president to be signed into law.
The act primarily seeks to amend US tax laws to eliminate double taxation between the US and Taiwan. This includes providing tax exemptions for eligible Taiwanese residents in the US and lowering withholding tax rates on certain types of income, such as dividends and interest, as reported by Focus Taiwan.
The bill also includes provisions to authorize the US president to negotiate and finalize a tax agreement with Taiwan, establishing the United States-Taiwan Tax Agreement Authorization Act.
Representative Judy Chu highlighted the challenges posed by current tax laws, stating, “Americans doing business in Taiwan must pay income tax in both places on the same earnings, and vice versa,” which has negatively impacted businesses of all sizes.
She emphasized that Taiwan is the only one among the US’s top 10 trading partners without a double tax agreement. According to a survey conducted by the American Institute in Taiwan, 79% of Taiwanese companies consider double taxation a significant barrier to increasing investment in the US.
Representative Jason Smith, Chair of the Ways and Means Committee, also addressed the issue, noting that Taiwan, despite being America’s eighth-largest trading partner, is absent from the list of 66 countries with US income tax treaties.
Smith stated that the new bill “promotes economic efficiency and integration, strengthens our strategic partnership with Taiwan, and reinforces the long-term economic stability American businesses and our trusted allies need to invest for the future and combat the influence of bad actors.”