The US-Taiwan Double Taxation Relief Bill is passed by the US House of Representatives

Washington: According to Central News Agency Taiwan, the US House of Representatives approved a measure on January 15 that would lower tax payments, avoid double taxation, and provide tax exemptions to Taiwanese workers, residents, and enterprises operating in the US.

The United States-Taiwan Expedited Double-Tax Relief Act was approved by the House by a vote of 423-1, according to Focus Taiwan. The US Senate will now vote on it, and if it passes, the president of the United States will sign it into law.

Preventing double taxation between the US and Taiwan is the primary goal of the measure. According to a Focus Taiwan article, it aims to change the present US tax regulations to cut the withholding tax rates on income from certain sources in the US, such as dividends and interest, and to provide tax exemptions to qualified Taiwanese people living in the US.

The United States president would be able “to negotiate and enter into a tax agreement relative to Taiwan” if the bill were to approve the United States-Taiwan Tax Agreement Authorization Act, according to Focus Taiwan. This is a major milestone.

According to Representative Judy Chu, the existing regulations have “hurt businesses of all sizes” since they oblige Americans doing business in Taiwan to pay income tax in two jurisdictions on the same profits.

Out of the top ten trade partners of the United States, she pointed out that “only Taiwan lacks a double tax agreement.”

She also cited a study by the American Institute in Taiwan that revealed that the necessity to double tax profits was “a considerable factor” that kept 79% of Taiwanese businesses from “investing more in the US.”

Focus Taiwan cited Representative Jason Smith, the head of the House’s Ways and Means Committee, who stated prior to the vote that although Taiwan is the eighth-largest trading partner of the United States, it has been “conspicuously absent” from the list of 66 nations with which the US has income tax treaties.

The proposed legislation “promotes economic efficiency and integration, strengthens our strategic partnership with Taiwan, and reinforces the long-term economic stability American businesses and our trusted allies need to invest for the future and combat the influence of bad actors,” Smith said.