The US Senate Foreign Relations Committee on Thursday passed the Taiwan Tax Agreement Act amid growing advocacy for the US government to enter into negotiations with Taiwan on the avoidance of double taxation.
The bill was originally proposed in May by US senators Robert Menendez, Chris van Hollen, Jim Risch and Mitt Rommey.
However, the bill passed by the committee came from a revised version presented on Thursday by Menendez, chairman of the Senate Foreign Relations Committee.
Photo: Reuters
The bill would authorize the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO) to negotiate a tax agreement in a bid to deal with double taxation issues, which Taiwanese investors in the US have sought to have changed.
The bill describes Taiwan as one of the largest trading partners of the US, as well as one of the world’s largest economies.
It says closer economic relations with Taiwan remain critical, in particular given Taiwan’s strategic importance and the increasing threat posed by China.
“A tax agreement with Taiwan would play a key role in facilitating and promoting increased bilateral investment and trade between the United States and Taiwan, fortifying the relationship between the two more generally, and encouraging other nations to increase their economic linkages to Taiwan,” it says.
It also stipulates that a future tax agreement would apply to tax residents of Taiwan and the US, but exclude enterprises headquartered in China or in a third country that does not have a comprehensive income tax treaty with Washington.
The US has signed tax agreements covering 65 jurisdictions to facilitate economic activity, boost bilateral cooperation, and benefit US businesses and individual taxpayers.
The US president would be required to provide written notification to the “appropriate congressional committees” of the commencement of negotiations between the AIT and TECRO on a tax agreement at least 15 calendar days before such commencement, the proposed legislation says.
Not later than 90 days after commencement of negotiations on the agreement, and every 180 days until the conclusion of the agreement, the US president would be required to provide a briefing to congressional committees providing an update on the status of negotiations, including a description of elements under negotiations, it says.
The committees involved would be the foreign relations, Senate finance, foreign affairs, and ways and means committees, it says.
It stipulates that a tax agreement would not take effect until Congress approves it.
Review of the bill by the Senate Foreign Relations Committee had been scheduled for June 8, but was delayed twice to Thursday partly due to a boycott by US Senator Rand Paul, who raised concerns over taxpayer privacy.
Taiwan has urged the US to enter into negotiations to sign an agreement to avoid double taxation.
When President Tsai Ing-wen (蔡英文) met with a US delegation in Taipei on July 4, she told them that Taiwan hopes to negotiate an agreement on avoiding double taxation with the US, as it would encourage bilateral investment and trade cooperation, and create more opportunities for businesses from both sides.
AIT Chair Laura Rosenberger in Washington on Thursday last week said that double taxation avoidance was an issue high on the radar of US policymakers, as well as Tsai and her colleagues.
LONG FLIGHT: The jets would be flown by US pilots, with Taiwanese copilots in the two-seat F-16D variant to help familiarize them with the aircraft, the source said The US is expected to fly 10 Lockheed Martin F-16C/D Block 70/72 jets to Taiwan over the coming months to fulfill a long-awaited order of 66 aircraft, a defense official said yesterday. Word that the first batch of the jets would be delivered soon was welcome news to Taiwan, which has become concerned about delays in the delivery of US arms amid rising military tensions with China. Speaking on condition of anonymity, the official said the initial tranche of the nation’s F-16s are rolling off assembly lines in the US and would be flown under their own power to Taiwan by way
CHIP WAR: The new restrictions are expected to cut off China’s access to Taiwan’s technologies, materials and equipment essential to building AI semiconductors Taiwan has blacklisted Huawei Technologies Co (華為) and Semiconductor Manufacturing International Corp (SMIC, 中芯), dealing another major blow to the two companies spearheading China’s efforts to develop cutting-edge artificial intelligence (AI) chip technologies. The Ministry of Economic Affairs’ International Trade Administration has included Huawei, SMIC and several of their subsidiaries in an update of its so-called strategic high-tech commodities entity list, the latest version on its Web site showed on Saturday. It did not publicly announce the change. Other entities on the list include organizations such as the Taliban and al-Qaeda, as well as companies in China, Iran and elsewhere. Local companies need
CRITICISM: It is generally accepted that the Straits Forum is a CCP ‘united front’ platform, and anyone attending should maintain Taiwan’s dignity, the council said The Mainland Affairs Council (MAC) yesterday said it deeply regrets that former president Ma Ying-jeou (馬英九) echoed the Chinese Communist Party’s (CCP) “one China” principle and “united front” tactics by telling the Straits Forum that Taiwanese yearn for both sides of the Taiwan Strait to move toward “peace” and “integration.” The 17th annual Straits Forum yesterday opened in Xiamen, China, and while the Chinese Nationalist Party’s (KMT) local government heads were absent for the first time in 17 years, Ma attended the forum as “former KMT chairperson” and met with Chinese People’s Political Consultative Conference Chairman Wang Huning (王滬寧). Wang
OBJECTS AT SEA: Satellites with synthetic-aperture radar could aid in the detection of small Chinese boats attempting to illegally enter Taiwan, the space agency head said Taiwan aims to send the nation’s first low Earth orbit (LEO) satellite into space in 2027, while the first Formosat-8 and Formosat-9 spacecraft are to be launched in October and 2028 respectively, the National Science and Technology Council said yesterday. The council laid out its space development plan in a report reviewed by members of the legislature’s Education and Culture Committee. Six LEO satellites would be produced in the initial phase, with the first one, the B5G-1A, scheduled to be launched in 2027, the council said in the report. Regarding the second satellite, the B5G-1B, the government plans to work with private contractors