U.S. Senators Todd Young (R-Ind.), Chris Van Hollen (D-Md.), Bill Cassidy (R-La.), Tim Kaine (D-Va.), Chris Coons (D-Del.), and Mitt Romney (R-Utah) have announced a bipartisan push towards the enactment of a new tax agreement with Taiwan. Today, the Senators introduced a resolution that encourages the Administration to begin negotiating a tax agreement with Taiwan in order to further strengthen economic ties between the U.S. and Taiwan.
“Our relationship with Taiwan has never been stronger, yet our tax policy fails to reflect the strength and importance of this relationship. Currently, U.S. and Taiwanese businesses are double-taxed, creating an unnecessary burden for those who seek to deepen economic ties between our two countries. To fix this, my colleagues and I are encouraging the President to align our policies with our interests by eliminating this harmful double tax,” said Senator Young.
“Taiwan is a key economic partner of the United States, but right now Taiwanese and U.S. businesses are double-taxed, putting an undue burden on these enterprises and hampering opportunities for further partnership and investment. A formal joint tax agreement is necessary to address this gap in our trade policy, and our bipartisan resolution urges the Biden Administration to begin the critical work to achieve this,” said Senator Van Hollen.
“In addition to being a key democratic ally in the Pacific, Taiwan is one of our largest trading partners,” said Dr. Cassidy. “Our resolution encourages the Biden administration to negotiate a tax agreement to make it easier to do business and avoid double taxation.”
“Throughout the years, the United States and Taiwan have forged deep and close ties between our two economies. A U.S.-Taiwan tax agreement is critical to ensuring our economic partnership remains strong and that we continue to deliver tangible benefits to American and Taiwanese businesses and consumers,” said Senator Kaine.
“Taiwan has long been a trusted partner of the United States,” said Senator Romney. “Our tax policies should reflect our commitment to our relationship with Taiwan. I’m proud to join my colleagues in introducing this legislation, which will continue to strengthen the ties between our two countries.”
The resolution would:
- Encourage the President to begin negotiations and encourage the House to work with the Senate on a congressional-executive agreement to establish an income tax agreement between the United States and Taiwan.
- Recognize the importance of Taiwan’s security and prosperity to the United States’ own security and prosperity and that eliminating double-taxation of U.S. and Taiwanese firms could boost bilateral trade and investment, potentially creating new job growth in the United States.
- Encourage the President to seek other ways to increase trade, technology, and investment ties between the United States and Taiwan.
- Taiwan is the United States’ largest trading partner with whom we do not currently have an income tax treaty.
- The U.S. has consistently pursued a robust unofficial partnership with Taiwan, including a strong economic relationship. Bilateral trade in goods and services totaled more than $100 billion in 2020.
- The U.S. already has multiple tax agreements in place with Taiwan, including a transportation income tax agreement and an agreement to facilitate implementation of the Foreign Account Tax Compliance Act (FATCA).