The first round of talks between Taiwan and the US on an agreement to prevent the double taxation of income is expected to take place in the coming weeks, the US Department of the Treasury said on Tuesday.
Both sides have said such an agreement would foster more investment, and Taipei has long pushed for it. The move was announced as a senior US diplomat who helps manage ties with Taiwan arrived in Taipei on Tuesday.
Washington and Taipei do not have formal diplomatic relations, so the lack of a tax agreement means Taiwanese businesses and individuals are taxed on their income by both the US and Taiwanese governments if they work or live in both nations.
Photo: Cheng I-hwa, Bloomberg
Taiwan is a major global supplier of semiconductors essential to a wide range of consumer goods and military equipment. Washington has been keen to get Taiwanese chip companies to build factories in the US.
The launch of the “negotiations on a comprehensive agreement to address double taxation issues” resulted from the US Congress’ efforts to push progress in the area through draft legislation, such as the proposed US-Taiwan Tax Agreement Authorization Act, the treasury department said in a press statement on Tuesday.
US President Joe Biden’s administration is committed to “engaging with relevant committees throughout the negotiation process and working with Congress on legislation to approve a final agreement and implement the agreement through the Internal Revenue Code,” it said.
Both the US and Taiwan can benefit from a comprehensive tax agreement, because such an agreement can “reduce double taxation barriers for further investment by Taiwan into the United States, and vice versa, particularly for the small and medium-sized enterprises that are crucial to a complete semiconductor ecosystem,” the treasury said.
The text of the agreement is expected to be based on the US Model Income Tax Convention and covers such issues as “reduction of withholding taxes on cross-border payments of dividends, interest and royalties,” and “provisions governing permanent establishments and tax treatment of temporary cross-border workers,” it said.
The agreement should also have “provisions intended to prevent instances of non-taxation of income as well as tax forum shopping,” dispute resolution mechanisms, and provisions for the exchange of information between the US and Taiwanese revenue authorities, so both of them can carry out their duties as tax administrators, it said.
The negotiations are to be conducted through the American Institute in Taiwan and the Taipei Economic and Cultural Representative Office in the US, it said.
As of July 31, Taiwan had signed comprehensive agreements on double taxation with 35 countries, including Canada, Germany, Israel, Japan, the UK, Australia and Paraguay, information published on the Ministry of Finance’s Web site shows.
ALIGNED THINKING: Taiwan and Japan have a mutual interest in trade, culture and engineering, and can work together for stability, Cho Jung-tai said Taiwan and Japan are two like-minded countries willing to work together to form a “safety barrier” in the Indo-Pacific region, Premier Cho Jung-tai (卓榮泰) yesterday said at the opening ceremony of the 35th Taiwan-Japan Modern Engineering and Technology Symposium in Taipei. Taiwan and Japan are close geographically and closer emotionally, he added. Citing the overflowing of a barrier lake in the Mataian River (馬太鞍溪) in September, Cho said the submersible water level sensors given by Japan during the disaster helped Taiwan monitor the lake’s water levels more accurately. Japan also provided a lot of vaccines early in the outbreak of the COVID-19 pandemic,
Kaohsiung Mayor Chen Chi-mai (陳其邁) on Monday announced light shows and themed traffic lights to welcome fans of South Korean pop group Twice to the port city. The group is to play Kaohsiung on Saturday as part of its “This Is For” world tour. It would be the group’s first performance in Taiwan since its debut 10 years ago. The all-female group consists of five South Koreans, three Japanese and Tainan’s Chou Tzu-yu (周子瑜), the first Taiwan-born and raised member of a South Korean girl group. To promote the group’s arrival, the city has been holding a series of events, including a pop-up
The Ministry of Foreign Affairs (MOFA) yesterday voiced dissatisfaction with the Comprehensive and Progressive Agreement for Trans- Pacific Partnership (CPTPP), whose latest meeting, concluded earlier the same day, appeared not to address the country’s application. In a statement, MOFA said the CPTPP commission had "once again failed to fairly process Taiwan’s application," attributing the inaction to the bloc’s "succumbing to political pressure," without elaborating. Taiwan submitted its CPTPP application under the name "Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu" on Sept. 22, 2021 -- less than a week after China
TEMPORAL/SPIRITUAL: Beijing’s claim that the next Buddhist leader must come from China is a heavy-handed political maneuver that will fall flat-faced, experts said China’s requirement that the Dalai Lama’s reincarnation to be born in China and approved by Beijing has drawn criticism, with experts at a forum in Taipei yesterday saying that if Beijing were to put forth its own Dalai Lama, the person would not be recognized by the Tibetan Buddhist community. The experts made a remarks at the two-day forum hosted by the Tibet Religious Foundation of His Holiness the Dalai Lama titled: “The Snow Land Forum: Finding Common Ground on Tibet.” China says it has the right to determine the Dalai Lama’s reincarnation, as it claims sovereignty over Tibet since ancient times,
RSS