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.
A small number of Taiwanese this year lost their citizenship rights after traveling in China and obtaining a one-time Chinese passport to cross the border into Russia, a source said today. The people signed up through Chinese travel agencies for tours of neighboring Russia with companies claiming they could obtain Russian visas and fast-track border clearance, the source said on condition of anonymity. The travelers were actually issued one-time-use Chinese passports, they said. Taiwanese are prohibited from holding a Chinese passport or household registration. If found to have a Chinese ID, they may lose their resident status under Article 9-1
PROCEDURE: Although there is already a cross-strait agreement in place for the extradition of criminals, ample notice is meant to be given to the other side first Ten Taiwanese who were involved in fraud-related crimes in China were extradited back to Taiwan via Kinmen County on Wednesday, four of whom are convicted fraudsters in Taiwan. The 10 people arrived via a ferry operating between Xiamen and Kinmen, also known as the “small three links.” The Kinmen County Prosecutors’ Office yesterday said that four of the 10 extradited people were convicted in Taiwan for committing fraud and contravening the Money Laundering Control Act (洗錢防制法), and were on the wanted list. They were immediately arrested upon arrival and sent to Kinmen Prison to serve their sentences following brief questioning, the office said.
‘REGRETTABLE’: Travelers reported that Seoul’s online arrival card system lists Taiwan as ‘China (Taiwan),’ the Ministry of Foreign Affairs said The Ministry of Foreign Affairs yesterday urged South Korea to correct the way Taiwan is listed in its newly launched e-Arrival card system, saying the current designation downgrades the nation’s status. South Korea rolled out the online system on Feb. 24 to gradually replace paper arrival cards, which it plans to phase out by next year. Travelers must complete the electronic form up to 72 hours before entering the country. The ministry said it has received multiple complaints from Taiwanese travelers saying that the system lists Taiwan as “China (Taiwan)” in dropdown menus for both “place of departure” and “next
VIGILANT: Enterovirus activity remains in the epidemic phase, with the CDC urging caregivers of infected children to be on the lookout for signs of severe illness Influenza activity is rising in neighboring countries, and, with temperatures forecast to drop this week, flu cases are expected to increase in the next two weeks, the Centers for Disease Control (CDC) said yesterday. Hospitals reported 87,162 visits for flu-like illnesses between Nov. 23 and Saturday, which remained about the same level as the previous week, but nine deaths and 24 cases with serious flu complications were also confirmed last week, CDC Epidemic Intelligence Center Director Guo Hung-wei (郭宏偉) said. Flu activity reached a peak in late September before declining for eight consecutive weeks, CDC Deputy Director-General and spokesman Lin Min-cheng (林明誠)
RSS