SENATE RESOLUTION 208

(By Senators Blair (Mr. President), Azinger, Barrett, Boley, Chapman, Clements, Deeds, Grady, Hamilton, Hunt, Jeffries, Maroney, Martin, Maynard, Nelson, Oliverio, Plymale, Phillips, Queen, Roberts, Rucker, Smith, Stover, Stuart, Swope, Takubo, Tarr, Taylor, Trump, Weld, and Woodrum)

[Introduced October 8, 2024]

Urging the United States Department of Treasury to enter an agreement with Taiwan to adopt the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on income agreement.

Whereas, The United States has entered into tax treaties covering more than 60 jurisdictions around the world which facilitate bilateral economic activity, strengthen global cooperation, and benefit US businesses and consumers; and

Whereas, Taiwan, with a population of 23.2 million has a rapidly expanding economy that produces items critical to the 21st century innovation economy and has the infrastructure to sustain continued development; and

Whereas, The United States Department of Commerce considers Taiwan a top source of job-creating foreign direct investment (FDI); however, Taiwan is one of only five tax jurisdictions enjoying such FDI distinction that does not currently have an ADTA in force with the United States; and

Whereas, Taiwanese companies are subject to a 30 percent withholding tax rate under current U.S. federal tax law; and

Whereas, 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, strengthening the relationship between the two democracies, and encouraging other countries around the globe to bolster their economic ties with Taiwan; and

Whereas, A United States-Taiwan ADTA can address double taxation arising from differing domestic tax laws in both democracies and resolve double taxation resulting from dual residency, where individuals are sometimes subject to full tax liability in both the U.S. and Taiwan jurisdictions, thereby facilitating a fair tax environment that benefits bilateral economic activity; and

Whereas, United States enterprises may also encounter dual source income issues when they conduct business in Taiwan; and

Whereas, Many of the countries with which the United States has negotiated tax treaties do not enjoy as close an economic or strategic partnership with the U.S. as Taiwan; and

Whereas, Taiwan is a true democratic republic, and the United States has an interest in protecting Taiwan’s sovereignty and territorial integrity from aggression by the People’s Republic of China, and maintaining close economic ties with Taiwan is one way to strengthen this robust democracy’s strategic position; and

Whereas, The conclusion of a United States-Taiwan ADTA will remove tax barriers and create a sustainable environment for cross-border investment and economic cooperation; and

Whereas, A United States-Taiwan ADTA would foster greater investment by Taiwanese industries in the U.S., creating jobs for Americans and securing supply chains for vital products, including, but not limited to, semiconductors; and

Whereas, Numerous nations around the globe, including significant United States trading partners like Canada, the United Kingdom, Australia, and Japan, have already adopted comprehensive income tax agreements with Taiwan.

Resolved by the Senate:

That the Senate hereby urges the United States Department of Treasury to enter an agreement with Taiwan to adopt the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on income agreement; and, be it

Further Resolved, That the members of the Southern Legislative Conference support the adoption and implementation of a United States-Taiwan Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income; and, be it

Further Resolved, That the Clerk is hereby directed to forward a copy of this resolution to the President of the United States, to the Secretary of State of the United States, to the United States Secretary of the Treasury, to the Chair and Ranking Member of the United States Senate Foreign Relations Committee, to the Chair and Ranking Member of the United States Senate Finance Committee, to the Chair and Ranking Member of the United States House Foreign Affairs Committee, to the Chair and Ranking member of the United States House Ways and Means Committee, and to the Commissioner of the Internal Revenue Service.