The US House of Representatives yesterday passed the US-Taiwan Expedited Double-Tax Relief Act by a 423 to 1 vote.
The act would first exempt taxation for qualifying Taiwanese residents who provide services in the US, and offer a lower withholding tax rate for qualified Taiwanese residents with particular types of US-sourced income such as dividends or interest.
Secondly, the United States-Taiwan Tax Agreement Authorization Act would improve tax cooperation between the two countries, granting the US president authority to negotiate and establish a tax agreement with Taiwan.
Photo: EPA
The bill is to be first sent to the US Senate to vote on before being sent to the US president for his signature to be passed into legislation.
Taiwan has been pushing for a double taxation act in recent years to benefit businesses on both sides of the Pacific.
The act failed to pass in the previous session of the US congress, but yesterday was passed after a second consideration in a new session of congress.
The act “paves the way for increased Taiwanese investment in the U.S. economy,” the New Democrat Coalition of the House said yesterday in a joint statement.
As the US and Taiwan have no formal diplomatic relations, for decades there was previously no tax agreement, forcing individuals to pay taxes to both governments if they live or work in both nations and giving Taiwanese businesses “an excessively high withholding tax when compared to other close trading partners,” the coalition said.
The bill aims to “lower costs on cross-border investment, help expand domestic production of key technologies including chips, and create high-paying jobs in communities across the [US],” it said.
As Taiwan is one of the US’ largest trade partners, the act would “unleash American manufacturing jobs, support [US] semiconductor and chip manufacturing capabilities and secure strategic supply chains, while reducing [US] dependence on China,” House Committee on Ways and Means Chairman Jason Smith said yesterday on X.
Without the agreement, US employees sent to Taiwan for training at semiconductor factories would have to pay double taxes on their income, US House Representative Judy Chu (趙美心) said.
The US has already signed double taxation agreements with more than 60 countries, but due to Taiwan’s unique political position it cannot partake in traditional tax agreements, making Taiwan the only one of the US’ top 10 trade partners without such an agreement, she added.
Taiwanese businesses have expressed to Chu that in the face of large tax bills, they have reduced investment in the US, while a survey conducted by the American Institute in Taiwan (AIT) found that 79 percent of respondents agreed that double taxation was a deterrent to US investments, she said.
In light of the House passing the bill, President William Lai (賴清德) said he hopes that Legislative Speaker Han Kuo-yu (韓國瑜), who is leading a delegation of bipartisan lawmakers to attend the US presidential inauguration of Donald Trump, could celebrate this new milestone in US-Taiwan relations in Washington as Lai met with the delegation at the Presidential Office this morning.
‘DENIAL DEFENSE’: The US would increase its military presence with uncrewed ships, and submarines, while boosting defense in the Indo-Pacific, a Pete Hegseth memo said The US is reorienting its military strategy to focus primarily on deterring a potential Chinese invasion of Taiwan, a memo signed by US Secretary of Defense Pete Hegseth showed. The memo also called on Taiwan to increase its defense spending. The document, known as the “Interim National Defense Strategic Guidance,” was distributed this month and detailed the national defense plans of US President Donald Trump’s administration, an article in the Washington Post said on Saturday. It outlines how the US can prepare for a potential war with China and defend itself from threats in the “near abroad,” including Greenland and the Panama
The Chinese Nationalist Party (KMT) is maintaining close ties with Beijing, the Democratic Progressive Party (DPP) said yesterday, hours after a new round of Chinese military drills in the Taiwan Strait began. Political parties in a democracy have a responsibility to be loyal to the nation and defend its sovereignty, DPP spokesman Justin Wu (吳崢) told a news conference in Taipei. His comments came hours after Beijing announced via Chinese state media that the Chinese People’s Liberation Army’s Eastern Theater Command was holding large-scale drills simulating a multi-pronged attack on Taiwan. Contrary to the KMT’s claims that it is staunchly anti-communist, KMT Deputy
RESPONSE: The government would investigate incidents of Taiwanese entertainers in China promoting CCP propaganda online in contravention of the law, the source said Taiwanese entertainers living in China who are found to have contravened cross-strait regulations or collaborated with the Chinese Communist Party (CCP) could be subject to fines, a source said on Sunday. Several Taiwanese entertainers have posted on the social media platform Sina Weibo saying that Taiwan “must be returned” to China, and sharing news articles from Chinese state media. In response, the Mainland Affairs Council (MAC) has asked the Ministry of Culture to investigate whether the entertainers had contravened any laws, and asked for them to be questioned upon their return to Taiwan, an official familiar with the matter said. To curb repeated
Myanmar has turned down an offer of assistance from Taiwanese search-and-rescue teams after a magnitude 7.7 earthquake struck the nation on Friday last week, saying other international aid is sufficient, the National Fire Agency said yesterday. More than 1,700 have been killed and 3,400 injured in the quake that struck near the central Myanmar city of Mandalay early on Friday afternoon, followed minutes later by a magnitude 6.7 aftershock. Worldwide, 13 international search-and-rescue teams have been deployed, with another 13 teams mobilizing, the agency said. Taiwan’s search-and-rescue teams were on standby, but have since been told to stand down, as
RSS