A bipartisan group of US senators on Thursday introduced legislation that would allow US President Joe Biden to sign a tax agreement with Taiwan, addressing an issue that businesses on both sides have pointed to as a barrier to further investment.
Such an agreement would allow the US and Taiwan to stop double taxing businesses that operate in each place.
Double taxation has become a major sticking point in US efforts to attract Taiwanese investment in semiconductors and other high-tech goods, with Taiwan saying the costs are too high.
Photo: Reuters
Taiwan is “crucial to supply chain resiliency and Americans’ future economic security,” US Senator Bob Menendez, chairman of the Senate Committee on Foreign Relations, said in a statement.
He called the legislation “more crucial than ever” as China uses coercive tactics to “thwart Taiwan’s international economic engagement.”
“A US-Taiwan tax agreement will help reduce unnecessary double taxation, help prevent tax evasion and remove barriers to trade between us,” said US Senator Jim Risch, a top-ranking member of the committee.
The legislation was introduced by Menendez, Risch and US senators Chris Van Hollen and Mitt Romney.
The measure was proposed a day after US Senate Majority Leader Chuck Schumer and fellow Democrats said they intended to craft a bipartisan and comprehensive bill to enhance US economic competition with China and respond to any aggression against Taiwan.
US Secretary of Commerce Gina Raimondo in an interview in February said that Taiwan Semiconductor Manufacturing Co (台積電) had raised the double taxation issue with her.
Companies such as the chipmaker “need a certain set of suppliers near them,” and the US should offer incentives for them to operate in the US, Raimondo said.
“As we get into this, we may need more help from Congress,” she said.
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