Us Congress 2025-2026 Regular Session

Us Congress Senate Bill SB199 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	II
2	2	119THCONGRESS
3	3	1
4	4	STSESSION S. 199
5	5	To amend the Internal Revenue Code of 1986 to provide special rules for
6	6	the taxation of certain residents of Taiwan with income from sources
7	7	within the United States.
8	8	IN THE SENATE OF THE UNITED STATES
9	9	JANUARY23, 2025
10	10	Mr. C
11	11	RAPO(for himself, Mr. RISCH, Mr. WYDEN, and Mrs. SHAHEEN) intro-
12	12	duced the following bill; which was read twice and referred to the Com-
13	13	mittee on Finance
14	14	A BILL
15	15	To amend the Internal Revenue Code of 1986 to provide
16	16	special rules for the taxation of certain residents of Tai-
17	17	wan with income from sources within the United States.
18	18	Be it enacted by the Senate and House of Representa-1
19	19	tives of the United States of America in Congress assembled, 2
20	20	TITLE I—UNITED STATES-TAI-3
21	21	WAN EXPEDITED DOUBLE- 4
22	22	TAX RELIEF ACT 5
23	23	SEC. 101. SHORT TITLE. 6
24	24	This title may be cited as the ‘‘United States-Taiwan 7
25	25	Expedited Double-Tax Relief Act’’. 8
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28	28	•S 199 IS
29	29	SEC. 102. SPECIAL RULES FOR TAXATION OF CERTAIN 1
30	30	RESIDENTS OF TAIWAN. 2
31	31	(a) I
32	32	NGENERAL.—Subpart D of part II of sub-3
33	33	chapter N of chapter 1 of the Internal Revenue Code of 4
34	34	1986 is amended by inserting after section 894 the fol-5
35	35	lowing new section: 6
36	36	‘‘SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF 7
37	37	TAIWAN. 8
38	38	‘‘(a) C
39	39	ERTAININCOMEFROMUNITEDSTATES 9
40	40	S
41	41	OURCES.— 10
42	42	‘‘(1) I
43	43	NTEREST, DIVIDENDS, AND ROYALTIES, 11
44	44	ETC.— 12
45	45	‘‘(A) I
46	46	N GENERAL.—In the case of interest 13
47	47	(other than original issue discount), dividends, 14
48	48	royalties, amounts described in section 15
49	49	871(a)(1)(C), and gains described in section 16
50	50	871(a)(1)(D) received by or paid to a qualified 17
51	51	resident of Taiwan— 18
52	52	‘‘(i) sections 871(a), 881(a), 1441(a), 19
53	53	1441(c)(5), and 1442(a) shall each be ap-20
54	54	plied by substituting ‘the applicable per-21
55	55	centage (as defined in section 22
56	56	894A(a)(1)(C))’ for ‘30 percent’ each place 23
57	57	it appears, and 24
58	58	‘‘(ii) sections 871(a), 881(a), and 25
59	59	1441(c)(1) shall each be applied by sub-26
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62	62	•S 199 IS
63	63	stituting ‘a United States permanent es-1
64	64	tablishment of a qualified resident of Tai-2
65	65	wan’ for ‘a trade or business within the 3
66	66	United States’ each place it appears. 4
67	67	‘‘(B) E
68	68	XCEPTIONS.— 5
69	69	‘‘(i) I
70	70	N GENERAL.—Subparagraph (A) 6
71	71	shall not apply to— 7
72	72	‘‘(I) any dividend received from 8
73	73	or paid by a real estate investment 9
74	74	trust which is not a qualified REIT 10
75	75	dividend, 11
76	76	‘‘(II) any amount subject to sec-12
77	77	tion 897, 13
78	78	‘‘(III) any amount received from 14
79	79	or paid by an expatriated entity (as 15
80	80	defined in section 7874(a)(2)) to a 16
81	81	foreign related person (as defined in 17
82	82	section 7874(d)(3)), and 18
83	83	‘‘(IV) any amount which is in-19
84	84	cluded in income under section 860C 20
85	85	to the extent that such amount does 21
86	86	not exceed an excess inclusion with re-22
87	87	spect to a REMIC. 23
88	88	‘‘(ii) Q
89	89	UALIFIED REIT DIVIDEND .— 24
90	90	For purposes of clause (i)(I), the term 25
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93	93	•S 199 IS
94	94	‘qualified REIT dividend’ means any divi-1
95	95	dend received from or paid by a real estate 2
96	96	investment trust if such dividend is paid 3
97	97	with respect to a class of shares that is 4
98	98	publicly traded and the recipient of the 5
99	99	dividend is a person who holds an interest 6
100	100	in any class of shares of the real estate in-7
101	101	vestment trust of not more than 5 percent. 8
102	102	‘‘(C) A
103	103	PPLICABLE PERCENTAGE .—For 9
104	104	purposes of applying subparagraph (A)(i)— 10
105	105	‘‘(i) I
106	106	N GENERAL.—Except as pro-11
107	107	vided in clause (ii), the term ‘applicable 12
108	108	percentage’ means 10 percent. 13
109	109	‘‘(ii) S
110	110	PECIAL RULES FOR DIVI -14
111	111	DENDS.—In the case of any dividend in re-15
112	112	spect of stock received by or paid to a 16
113	113	qualified resident of Taiwan, the applicable 17
114	114	percentage shall be 15 percent (10 percent 18
115	115	in the case of a dividend which meets the 19
116	116	requirements of subparagraph (D) and is 20
117	117	received by or paid to an entity taxed as 21
118	118	a corporation in Taiwan). 22
119	119	‘‘(D) R
120	120	EQUIREMENTS FOR LOWER DIVI -23
121	121	DEND RATE.— 24
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124	124	•S 199 IS
125	125	‘‘(i) IN GENERAL.—The requirements 1
126	126	of this subparagraph are met with respect 2
127	127	to any dividend in respect of stock in a 3
128	128	corporation if, at all times during the 12- 4
129	129	month period ending on the date such 5
130	130	stock becomes ex-dividend with respect to 6
131	131	such dividend— 7
132	132	‘‘(I) the dividend is derived by a 8
133	133	qualified resident of Taiwan, and 9
134	134	‘‘(II) such qualified resident of 10
135	135	Taiwan has held directly at least 10 11
136	136	percent (by vote and value) of the 12
137	137	total outstanding shares of stock in 13
138	138	such corporation. 14
139	139	For purposes of subclause (II), a person 15
140	140	shall be treated as directly holding a share 16
141	141	of stock during any period described in the 17
142	142	preceding sentence if the share was held by 18
143	143	a corporation from which such person later 19
144	144	acquired that share and such corporation 20
145	145	was, at the time the share was acquired, 21
146	146	both a connected person to such person 22
147	147	and a qualified resident of Taiwan. 23
148	148	‘‘(ii) E
149	149	XCEPTION FOR RICS AND 24
150	150	REITS.—Notwithstanding clause (i), the re-25
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153	153	•S 199 IS
154	154	quirements of this subparagraph shall not 1
155	155	be treated as met with respect to any divi-2
156	156	dend paid by a regulated investment com-3
157	157	pany or a real estate investment trust. 4
158	158	‘‘(2) Q
159	159	UALIFIED WAGES.— 5
160	160	‘‘(A) I
161	161	N GENERAL.—No tax shall be im-6
162	162	posed under this chapter (and no amount shall 7
163	163	be withheld under section 1441(a) or chapter 8
164	164	24) with respect to qualified wages paid to a 9
165	165	qualified resident of Taiwan who— 10
166	166	‘‘(i) is not a resident of the United 11
167	167	States (determined without regard to sub-12
168	168	section (c)(3)(E)), or 13
169	169	‘‘(ii) is employed as a member of the 14
170	170	regular component of a ship or aircraft op-15
171	171	erated in international traffic. 16
172	172	‘‘(B) Q
173	173	UALIFIED WAGES.— 17
174	174	‘‘(i) I
175	175	N GENERAL.—The term ‘quali-18
176	176	fied wages’ means wages, salaries, or simi-19
177	177	lar remunerations with respect to employ-20
178	178	ment involving the performance of personal 21
179	179	services within the United States which— 22
180	180	‘‘(I) are paid by (or on behalf of) 23
181	181	any employer other than a United 24
182	182	States person, and 25
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185	185	•S 199 IS
186	186	‘‘(II) are not borne by a United 1
187	187	States permanent establishment of 2
188	188	any person other than a United States 3
189	189	person. 4
190	190	‘‘(ii) E
191	191	XCEPTIONS.—Such term shall 5
192	192	not include directors’ fees, income derived 6
193	193	as an entertainer or athlete, income de-7
194	194	rived as a student or trainee, pensions, 8
195	195	amounts paid with respect to employment 9
196	196	with the United States, any State (or polit-10
197	197	ical subdivision thereof), or any possession 11
198	198	of the United States (or any political sub-12
199	199	division thereof), or other amounts speci-13
200	200	fied in regulations or guidance under sub-14
201	201	section (f)(1)(F). 15
202	202	‘‘(3) I
203	203	NCOME DERIVED FROM ENTERTAINMENT 16
204	204	OR ATHLETIC ACTIVITIES.— 17
205	205	‘‘(A) I
206	206	N GENERAL.—No tax shall be im-18
207	207	posed under this chapter (and no amount shall 19
208	208	be withheld under section 1441(a) or chapter 20
209	209	24) with respect to income derived by an enter-21
210	210	tainer or athlete who is a qualified resident of 22
211	211	Taiwan from personal activities as such per-23
212	212	formed in the United States if the aggregate 24
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215	215	•S 199 IS
216	216	amount of gross receipts from such activities 1
217	217	for the taxable year do not exceed $30,000. 2
218	218	‘‘(B) E
219	219	XCEPTION.—Subparagraph (A) 3
220	220	shall not apply with respect to— 4
221	221	‘‘(i) income which is qualified wages 5
222	222	(as defined in paragraph (2)(B), deter-6
223	223	mined without regard to clause (ii) there-7
224	224	of), or 8
225	225	‘‘(ii) income which is effectively con-9
226	226	nected with a United States permanent es-10
227	227	tablishment. 11
228	228	‘‘(b) I
229	229	NCOMECONNECTEDWITH AUNITEDSTATES 12
230	230	P
231	231	ERMANENT ESTABLISHMENT OF A QUALIFIEDRESI-13
232	232	DENT OFTAIWAN.— 14
233	233	‘‘(1) I
234	234	N GENERAL.— 15
235	235	‘‘(A) I
236	236	N GENERAL.—In lieu of applying 16
237	237	sections 871(b) and 882, a qualified resident of 17
238	238	Taiwan that carries on a trade or business 18
239	239	within the United States through a United 19
240	240	States permanent establishment shall be taxable 20
241	241	as provided in section 1, 11, 55, or 59A, on its 21
242	242	taxable income which is effectively connected 22
243	243	with such permanent establishment. 23
244	244	‘‘(B) D
245	245	ETERMINATION OF TAXABLE IN -24
246	246	COME.—In determining taxable income for pur-25
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249	249	•S 199 IS
250	250	poses of paragraph (1), gross income includes 1
251	251	only gross income which is effectively connected 2
252	252	with the permanent establishment. 3
253	253	‘‘(2) T
254	254	REATMENT OF DISPOSITIONS OF UNITED 4
255	255	STATES REAL PROPERTY .—In the case of a qualified 5
256	256	resident of Taiwan, section 897(a) shall be applied— 6
257	257	‘‘(A) by substituting ‘carried on a trade or 7
258	258	business within the United States through a 8
259	259	United States permanent establishment’ for 9
260	260	‘were engaged in a trade or business within the 10
261	261	United States’, and 11
262	262	‘‘(B) by substituting ‘such United States 12
263	263	permanent establishment’ for ‘such trade or 13
264	264	business’. 14
265	265	‘‘(3) T
266	266	REATMENT OF BRANCH PROFITS 15
267	267	TAXES.—In the case of any corporation which is a 16
268	268	qualified resident of Taiwan, section 884 shall be ap-17
269	269	plied— 18
270	270	‘‘(A) by substituting ‘10 percent’ for ‘30 19
271	271	percent’ in subsection (a) thereof, and 20
272	272	‘‘(B) by substituting ‘a United States per-21
273	273	manent establishment of a qualified resident of 22
274	274	Taiwan’ for ‘the conduct of a trade or business 23
275	275	within the United States’ in subsection (d)(1) 24
276	276	thereof. 25
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279	279	•S 199 IS
280	280	‘‘(4) SPECIAL RULE WITH RESPECT TO INCOME 1
281	281	DERIVED FROM CERTAIN ENTERTAINMENT OR ATH -2
282	282	LETIC ACTIVITIES.— 3
283	283	‘‘(A) I
284	284	N GENERAL.—Paragraph (1) shall 4
285	285	not apply to the extent that the income is de-5
286	286	rived— 6
287	287	‘‘(i) in respect of entertainment or 7
288	288	athletic activities performed in the United 8
289	289	States, and 9
290	290	‘‘(ii) by a qualified resident of Taiwan 10
291	291	who is not the entertainer or athlete per-11
292	292	forming such activities. 12
293	293	‘‘(B) E
294	294	XCEPTION.—Subparagraph (A) 13
295	295	shall not apply if the person described in sub-14
296	296	paragraph (A)(ii) is contractually authorized to 15
297	297	designate the individual who is to perform such 16
298	298	activities. 17
299	299	‘‘(5) S
300	300	PECIAL RULE WITH RESPECT TO CER -18
301	301	TAIN AMOUNTS.—Paragraph (1) shall not apply to 19
302	302	any income which is wages, salaries, or similar re-20
303	303	muneration with respect to employment or with re-21
304	304	spect to any amount which is described in subsection 22
305	305	(a)(2)(B)(ii). 23
306	306	‘‘(c) Q
307	307	UALIFIEDRESIDENT OFTAIWAN.—For pur-24
308	308	poses of this section— 25
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311	311	•S 199 IS
312	312	‘‘(1) IN GENERAL.—The term ‘qualified resi-1
313	313	dent of Taiwan’ means any person who— 2
314	314	‘‘(A) is liable to tax under the laws of Tai-3
315	315	wan by reason of such person’s domicile, resi-4
316	316	dence, place of management, place of incorpora-5
317	317	tion, or any similar criterion, 6
318	318	‘‘(B) is not a United States person (deter-7
319	319	mined without regard to paragraph (3)(E)), 8
320	320	and 9
321	321	‘‘(C) in the case of an entity taxed as a 10
322	322	corporation in Taiwan, meets the requirements 11
323	323	of paragraph (2). 12
324	324	‘‘(2) L
325	325	IMITATION ON BENEFITS FOR COR -13
326	326	PORATE ENTITIES OF TAIWAN .— 14
327	327	‘‘(A) I
328	328	N GENERAL.—Subject to subpara-15
329	329	graphs (E) and (F), an entity meets the re-16
330	330	quirements of this paragraph only if it— 17
331	331	‘‘(i) meets the ownership and income 18
332	332	requirements of subparagraph (B), 19
333	333	‘‘(ii) meets the publicly traded re-20
334	334	quirements of subparagraph (C), or 21
335	335	‘‘(iii) meets the qualified subsidiary 22
336	336	requirements of subparagraph (D). 23
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339	339	•S 199 IS
340	340	‘‘(B) OWNERSHIP AND INCOME REQUIRE -1
341	341	MENTS.—The requirements of this subpara-2
342	342	graph are met for an entity if— 3
343	343	‘‘(i) at least 50 percent (by vote and 4
344	344	value) of the total outstanding shares of 5
345	345	stock in such entity are owned directly or 6
346	346	indirectly by qualified residents of Taiwan, 7
347	347	and 8
348	348	‘‘(ii) less than 50 percent of such enti-9
349	349	ty’s gross income (and in the case of an 10
350	350	entity that is a member of a tested group, 11
351	351	less than 50 percent of the tested group’s 12
352	352	gross income) is paid or accrued, directly 13
353	353	or indirectly, in the form of payments that 14
354	354	are deductible for purposes of the income 15
355	355	taxes imposed by Taiwan, to persons who 16
356	356	are not— 17
357	357	‘‘(I) qualified residents of Tai-18
358	358	wan, or 19
359	359	‘‘(II) United States persons who 20
360	360	meet such requirements with respect 21
361	361	to the United States as determined by 22
362	362	the Secretary to be equivalent to the 23
363	363	requirements of this subsection (deter-24
364	364	mined without regard to paragraph 25
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367	367	•S 199 IS
368	368	(1)(B)) with respect to residents of 1
369	369	Taiwan. 2
370	370	‘‘(C) P
371	371	UBLICLY TRADED REQUIRE -3
372	372	MENTS.—An entity meets the requirements of 4
373	373	this subparagraph if— 5
374	374	‘‘(i) the principal class of its shares 6
375	375	(and any disproportionate class of shares) 7
376	376	of such entity are primarily and regularly 8
377	377	traded on an established securities market 9
378	378	in Taiwan, or 10
379	379	‘‘(ii) the primary place of manage-11
380	380	ment and control of the entity is in Taiwan 12
381	381	and all classes of its outstanding shares 13
382	382	described in clause (i) are regularly traded 14
383	383	on an established securities market in Tai-15
384	384	wan. 16
385	385	‘‘(D) Q
386	386	UALIFIED SUBSIDIARY REQUIRE -17
387	387	MENTS.—An entity meets the requirement of 18
388	388	this subparagraph if— 19
389	389	‘‘(i) at least 50 percent (by vote and 20
390	390	value) of the total outstanding shares of 21
391	391	the stock of such entity are owned directly 22
392	392	or indirectly by 5 or fewer entities— 23
393	393	‘‘(I) which meet the requirements 24
394	394	of subparagraph (C), or 25
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397	397	•S 199 IS
398	398	‘‘(II) which are United States 1
399	399	persons the principal class of the 2
400	400	shares (and any disproportionate class 3
401	401	of shares) of which are primarily and 4
402	402	regularly traded on an established se-5
403	403	curities market in the United States, 6
404	404	and 7
405	405	‘‘(ii) the entity meets the require-8
406	406	ments of clause (ii) of subparagraph (B). 9
407	407	‘‘(E) O
408	408	NLY INDIRECT OWNERSHIP 10
409	409	THROUGH QUALIFYING INTERMEDIARIES 11
410	410	COUNTED.— 12
411	411	‘‘(i) I
412	412	N GENERAL.—Stock in an entity 13
413	413	owned by a person indirectly through 1 or 14
414	414	more other persons shall not be treated as 15
415	415	owned by such person in determining 16
416	416	whether the person meets the requirements 17
417	417	of subparagraph (B)(i) or (D)(i) unless all 18
418	418	such other persons are qualifying inter-19
419	419	mediate owners. 20
420	420	‘‘(ii) Q
421	421	UALIFYING INTERMEDIATE 21
422	422	OWNERS.—The term ‘qualifying inter-22
423	423	mediate owner’ means a person that is— 23
424	424	‘‘(I) a qualified resident of Tai-24
425	425	wan, or 25
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428	428	•S 199 IS
429	429	‘‘(II) a resident of any other for-1
430	430	eign country (other than a foreign 2
431	431	country that is a foreign country of 3
432	432	concern) that has in effect a com-4
433	433	prehensive convention with the United 5
434	434	States for the avoidance of double tax-6
435	435	ation. 7
436	436	‘‘(iii) S
437	437	PECIAL RULE FOR QUALIFIED 8
438	438	SUBSIDIARIES.—For purposes of applying 9
439	439	subparagraph (D)(i), the term ‘qualifying 10
440	440	intermediate owner’ shall include any per-11
441	441	son who is a United States person who 12
442	442	meets such requirements with respect to 13
443	443	the United States as determined by the 14
444	444	Secretary to be equivalent to the require-15
445	445	ments of this subsection (determined with-16
446	446	out regard to paragraph (1)(B)) with re-17
447	447	spect to residents of Taiwan. 18
448	448	‘‘(F) C
449	449	ERTAIN PAYMENTS NOT IN -19
450	450	CLUDED.—In determining whether the require-20
451	451	ments of subparagraph (B)(ii) or (D)(ii) are 21
452	452	met with respect to an entity, the following pay-22
453	453	ments shall not be taken into account: 23
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456	456	•S 199 IS
457	457	‘‘(i) Arm’s-length payments by the en-1
458	458	tity in the ordinary course of business for 2
459	459	services or tangible property. 3
460	460	‘‘(ii) In the case of a tested group, 4
461	461	intra-group transactions. 5
462	462	‘‘(3) D
463	463	UAL RESIDENTS.— 6
464	464	‘‘(A) R
465	465	ULES FOR DETERMINATION OF STA -7
466	466	TUS.— 8
467	467	‘‘(i) I
468	468	N GENERAL.—An individual who 9
469	469	is an applicable dual resident and who is 10
470	470	described in subparagraph (B), (C), or (D) 11
471	471	shall be treated as a qualified resident of 12
472	472	Taiwan. 13
473	473	‘‘(ii) A
474	474	PPLICABLE DUAL RESIDENT .— 14
475	475	For purposes of this paragraph, the term 15
476	476	‘applicable dual resident’ means an indi-16
477	477	vidual who— 17
478	478	‘‘(I) is not a United States cit-18
479	479	izen, 19
480	480	‘‘(II) is a resident of the United 20
481	481	States (determined without regard to 21
482	482	subparagraph (E)), and 22
483	483	‘‘(III) would be a qualified resi-23
484	484	dent of Taiwan but for paragraph 24
485	485	(1)(B). 25
486	486	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00016 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
487	487	kjohnson on DSK7ZCZBW3PROD with $$_JOB 17
488	488	•S 199 IS
489	489	‘‘(B) PERMANENT HOME .—An individual 1
490	490	is described in this subparagraph if such indi-2
491	491	vidual— 3
492	492	‘‘(i) has a permanent home available 4
493	493	to such individual in Taiwan, and 5
494	494	‘‘(ii) does not have a permanent home 6
495	495	available to such individual in the United 7
496	496	States. 8
497	497	‘‘(C) C
498	498	ENTER OF VITAL INTERESTS .—An 9
499	499	individual is described in this subparagraph if— 10
500	500	‘‘(i) such individual has a permanent 11
501	501	home available to such individual in both 12
502	502	Taiwan and the United States, and 13
503	503	‘‘(ii) such individual’s personal and 14
504	504	economic relations (center of vital inter-15
505	505	ests) are closer to Taiwan than to the 16
506	506	United States. 17
507	507	‘‘(D) H
508	508	ABITUAL ABODE.—An individual is 18
509	509	described in this subparagraph if— 19
510	510	‘‘(i) such individual— 20
511	511	‘‘(I) does not have a permanent 21
512	512	home available to such individual in 22
513	513	either Taiwan or the United States, or 23
514	514	‘‘(II) has a permanent home 24
515	515	available to such individual in both 25
516	516	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00017 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
517	517	kjohnson on DSK7ZCZBW3PROD with $$_JOB 18
518	518	•S 199 IS
519	519	Taiwan and the United States but 1
520	520	such individual’s center of vital inter-2
521	521	ests under subparagraph (C)(ii) can-3
522	522	not be determined, and 4
523	523	‘‘(ii) such individual has a habitual 5
524	524	abode in Taiwan and not the United 6
525	525	States. 7
526	526	‘‘(E) U
527	527	NITED STATES TAX TREATMENT OF 8
528	528	QUALIFIED RESIDENT OF TAIWAN .—Notwith-9
529	529	standing section 7701, an individual who is 10
530	530	treated as a qualified resident of Taiwan by 11
531	531	reason of this paragraph for all or any portion 12
532	532	of a taxable year shall not be treated as a resi-13
533	533	dent of the United States for purposes of com-14
534	534	puting such individual’s United States income 15
535	535	tax liability for such taxable year or portion 16
536	536	thereof. 17
537	537	‘‘(4) R
538	538	ULES OF SPECIAL APPLICATION .— 18
539	539	‘‘(A) D
540	540	IVIDENDS.—For purposes of apply-19
541	541	ing this section to any dividend, paragraph 20
542	542	(2)(D) shall be applied without regard to clause 21
543	543	(ii) thereof. 22
544	544	‘‘(B) I
545	545	TEMS OF INCOME EMANATING FROM 23
546	546	AN ACTIVE TRADE OR BUSINESS IN TAIWAN .— 24
547	547	For purposes of this section— 25
548	548	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
549	549	kjohnson on DSK7ZCZBW3PROD with $$_JOB 19
550	550	•S 199 IS
551	551	‘‘(i) IN GENERAL.—Notwithstanding 1
552	552	the preceding paragraphs of this sub-2
553	553	section, if an entity taxed as a corporation 3
554	554	in Taiwan is not a qualified resident of 4
555	555	Taiwan but meets the requirements of sub-5
556	556	paragraphs (A) and (B) of paragraph (1), 6
557	557	any qualified item of income such entity 7
558	558	derived from the United States shall be 8
559	559	treated as income of a qualified resident of 9
560	560	Taiwan. 10
561	561	‘‘(ii) Q
562	562	UALIFIED ITEMS OF INCOME .— 11
563	563	‘‘(I) I
564	564	N GENERAL.—The term 12
565	565	‘qualified item of income’ means any 13
566	566	item of income which emanates from, 14
567	567	or is incidental to, the conduct of an 15
568	568	active trade or business in Taiwan 16
569	569	(other than operating as a holding 17
570	570	company, providing overall supervision 18
571	571	or administration of a group of com-19
572	572	panies, providing group financing, or 20
573	573	making or managing investments (un-21
574	574	less such making or managing invest-22
575	575	ments is carried on by a bank, insur-23
576	576	ance company, or registered securities 24
577	577	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00019 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
578	578	kjohnson on DSK7ZCZBW3PROD with $$_JOB 20
579	579	•S 199 IS
580	580	dealer in the ordinary course of its 1
581	581	business as such)). 2
582	582	‘‘(II) S
583	583	UBSTANTIAL ACTIVITY RE-3
584	584	QUIREMENT.—An item of income 4
585	585	which is derived from a trade or busi-5
586	586	ness conducted in the United States 6
587	587	or from a connected person shall be a 7
588	588	qualified item of income only if the 8
589	589	trade or business activity conducted in 9
590	590	Taiwan to which the item is related is 10
591	591	substantial in relation to the same or 11
592	592	a complementary trade or business ac-12
593	593	tivity carried on in the United States. 13
594	594	For purposes of applying this sub-14
595	595	clause, activities conducted by persons 15
596	596	that are connected to the entity de-16
597	597	scribed in clause (i) shall be deemed 17
598	598	to be conducted by such entity. 18
599	599	‘‘(iii) E
600	600	XCEPTION.—This subpara-19
601	601	graph shall not apply to any item of in-20
602	602	come derived by an entity if at least 50 21
603	603	percent (by vote or value) of such entity is 22
604	604	owned (directly or indirectly) or controlled 23
605	605	by residents of a foreign country of con-24
606	606	cern. 25
607	607	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
608	608	kjohnson on DSK7ZCZBW3PROD with $$_JOB 21
609	609	•S 199 IS
610	610	‘‘(d) OTHERDEFINITIONS ANDSPECIALRULES.— 1
611	611	For purposes of this section— 2
612	612	‘‘(1) U
613	613	NITED STATES PERMANENT ESTABLISH -3
614	614	MENT.— 4
615	615	‘‘(A) I
616	616	N GENERAL.—The term ‘United 5
617	617	States permanent establishment’ means, with 6
618	618	respect to a qualified resident of Taiwan, a per-7
619	619	manent establishment of such resident which is 8
620	620	within the United States. 9
621	621	‘‘(B) S
622	622	PECIAL RULE.—The determination 10
623	623	of whether there is a permanent establishment 11
624	624	of a qualified resident of Taiwan within the 12
625	625	United States shall be made without regard to 13
626	626	whether an entity which is taxed as a corpora-14
627	627	tion in Taiwan and which is a qualified resident 15
628	628	of Taiwan controls or is controlled by— 16
629	629	‘‘(i) a domestic corporation, or 17
630	630	‘‘(ii) any other person that carries on 18
631	631	business in the United States (whether 19
632	632	through a permanent establishment or oth-20
633	633	erwise). 21
634	634	‘‘(2) P
635	635	ERMANENT ESTABLISHMENT .— 22
636	636	‘‘(A) I
637	637	N GENERAL.—The term ‘permanent 23
638	638	establishment’ means a fixed place of business 24
639	639	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00021 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
640	640	kjohnson on DSK7ZCZBW3PROD with $$_JOB 22
641	641	•S 199 IS
642	642	through which a trade or business is wholly or 1
643	643	partly carried on. Such term shall include— 2
644	644	‘‘(i) a place of management, 3
645	645	‘‘(ii) a branch, 4
646	646	‘‘(iii) an office, 5
647	647	‘‘(iv) a factory, 6
648	648	‘‘(v) a workshop, and 7
649	649	‘‘(vi) a mine, an oil or gas well, a 8
650	650	quarry, or any other place of extraction of 9
651	651	natural resources. 10
652	652	‘‘(B) S
653	653	PECIAL RULES FOR CERTAIN TEM -11
654	654	PORARY PROJECTS.— 12
655	655	‘‘(i) I
656	656	N GENERAL.—A building site or 13
657	657	construction or installation project, or an 14
658	658	installation or drilling rig or ship used for 15
659	659	the exploration or exploitation of the sea 16
660	660	bed and its subsoil and their natural re-17
661	661	sources, constitutes a permanent establish-18
662	662	ment only if it lasts, or the activities of the 19
663	663	rig or ship lasts, for more than 12 months. 20
664	664	‘‘(ii) D
665	665	ETERMINATION OF 12 -MONTH 21
666	666	PERIOD.—For purposes of clause (i), the 22
667	667	period over which a building site or con-23
668	668	struction or installation project of a person 24
669	669	lasts shall include any period of more than 25
670	670	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
671	671	kjohnson on DSK7ZCZBW3PROD with $$_JOB 23
672	672	•S 199 IS
673	673	30 days during which such person does not 1
674	674	carry on activities at such building site or 2
675	675	construction or installation project but 3
676	676	connected activities are carried on at such 4
677	677	building site or construction or installation 5
678	678	project by one or more connected persons. 6
679	679	‘‘(C) H
680	680	ABITUAL EXERCISE OF CONTRACT 7
681	681	AUTHORITY TREATED AS PERMANENT ESTAB -8
682	682	LISHMENT.—Notwithstanding subparagraphs 9
683	683	(A) and (B), where a person (other than an 10
684	684	agent of an independent status to whom sub-11
685	685	paragraph (D)(ii) applies) is acting on behalf of 12
686	686	a trade or business of a qualified resident of 13
687	687	Taiwan and has and habitually exercises an au-14
688	688	thority to conclude contracts that are binding 15
689	689	on the trade or business, that trade or business 16
690	690	shall be deemed to have a permanent establish-17
691	691	ment in the country in which such authority is 18
692	692	exercised in respect of any activities that the 19
693	693	person undertakes for the trade or business, un-20
694	694	less the activities of such person are limited to 21
695	695	those described in subparagraph (D)(i) that, if 22
696	696	exercised through a fixed place of business, 23
697	697	would not make this fixed place of business a 24
698	698	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00023 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
699	699	kjohnson on DSK7ZCZBW3PROD with $$_JOB 24
700	700	•S 199 IS
701	701	permanent establishment under the provisions 1
702	702	of that subparagraph. 2
703	703	‘‘(D) E
704	704	XCLUSIONS.— 3
705	705	‘‘(i) I
706	706	N GENERAL.—Notwithstanding 4
707	707	subparagraphs (A) and (B), the term ‘per-5
708	708	manent establishment’ shall not include— 6
709	709	‘‘(I) the use of facilities solely for 7
710	710	the purpose of storage, display, or de-8
711	711	livery of goods or merchandise belong-9
712	712	ing to the trade or business, 10
713	713	‘‘(II) the maintenance of a stock 11
714	714	of goods or merchandise belonging to 12
715	715	the trade or business solely for the 13
716	716	purpose of storage, display, or deliv-14
717	717	ery, 15
718	718	‘‘(III) the maintenance of a stock 16
719	719	of goods or merchandise belonging to 17
720	720	the trade or business solely for the 18
721	721	purpose of processing by another 19
722	722	trade or business, 20
723	723	‘‘(IV) the maintenance of a fixed 21
724	724	place of business solely for the pur-22
725	725	pose of purchasing goods or merchan-23
726	726	dise, or of collecting information, for 24
727	727	the trade or business, 25
728	728	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00024 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
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730	730	•S 199 IS
731	731	‘‘(V) the maintenance of a fixed 1
732	732	place of business solely for the pur-2
733	733	pose of carrying on, for the trade or 3
734	734	business, any other activity of a pre-4
735	735	paratory or auxiliary character, or 5
736	736	‘‘(VI) the maintenance of a fixed 6
737	737	place of business solely for any com-7
738	738	bination of the activities mentioned in 8
739	739	subclauses (I) through (V), provided 9
740	740	that the overall activity of the fixed 10
741	741	place of business resulting from this 11
742	742	combination is of a preparatory or 12
743	743	auxiliary character. 13
744	744	‘‘(ii) B
745	745	ROKERS AND OTHER INDE -14
746	746	PENDENT AGENTS .—A trade or business 15
747	747	shall not be considered to have a perma-16
748	748	nent establishment in a country merely be-17
749	749	cause it carries on business in such coun-18
750	750	try through a broker, general commission 19
751	751	agent, or any other agent of an inde-20
752	752	pendent status, provided that such persons 21
753	753	are acting in the ordinary course of their 22
754	754	business as independent agents. 23
755	755	‘‘(3) T
756	756	ESTED GROUP.—The term ‘tested group’ 24
757	757	includes, with respect to any entity taxed as a cor-25
758	758	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
759	759	kjohnson on DSK7ZCZBW3PROD with $$_JOB 26
760	760	•S 199 IS
761	761	poration in Taiwan, such entity and any other entity 1
762	762	taxed as a corporation in Taiwan that— 2
763	763	‘‘(A) participates as a member with such 3
764	764	entity in a tax consolidation, fiscal unity, or 4
765	765	similar regime that requires members of the 5
766	766	group to share profits or losses, or 6
767	767	‘‘(B) shares losses with such entity pursu-7
768	768	ant to a group relief or other loss sharing re-8
769	769	gime. 9
770	770	‘‘(4) C
771	771	ONNECTED PERSON .—Two persons shall 10
772	772	be ‘connected persons’ if one owns, directly or indi-11
773	773	rectly, at least 50 percent of the interests in the 12
774	774	other (or, in the case of a corporation, at least 50 13
775	775	percent of the aggregate vote and value of the cor-14
776	776	poration’s shares) or another person owns, directly 15
777	777	or indirectly, at least 50 percent of the interests (or, 16
778	778	in the case of a corporation, at least 50 percent of 17
779	779	the aggregate vote and value of the corporation’s 18
780	780	shares) in each person. In any case, a person shall 19
781	781	be connected to another if, based on all the relevant 20
782	782	facts and circumstances, one has control of the other 21
783	783	or both are under the control of the same person or 22
784	784	persons. 23
785	785	‘‘(5) F
786	786	OREIGN COUNTRY OF CONCERN .—The 24
787	787	term ‘foreign country of concern’ has the meaning 25
788	788	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00026 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
789	789	kjohnson on DSK7ZCZBW3PROD with $$_JOB 27
790	790	•S 199 IS
791	791	given such term under paragraph (7) of section 1
792	792	9901 of the William M. (Mac) Thornberry National 2
793	793	Defense Authorization Act for Fiscal Year 2021 (15 3
794	794	U.S.C. 4651(7)), as added by section 103(a)(4) of 4
795	795	the CHIPS Act of 2022). 5
796	796	‘‘(6) P
797	797	ARTNERSHIPS; BENEFICIARIES OF ES -6
798	798	TATES AND TRUSTS.—For purposes of this section— 7
799	799	‘‘(A) a qualified resident of Taiwan which 8
800	800	is a partner of a partnership which carries on 9
801	801	a trade or business within the United States 10
802	802	through a United States permanent establish-11
803	803	ment shall be treated as carrying on such trade 12
804	804	or business through such permanent establish-13
805	805	ment, and 14
806	806	‘‘(B) a qualified resident of Taiwan which 15
807	807	is a beneficiary of an estate or trust which car-16
808	808	ries on a trade or business within the United 17
809	809	States through a United States permanent es-18
810	810	tablishment shall be treated as carrying on such 19
811	811	trade or business through such permanent es-20
812	812	tablishment. 21
813	813	‘‘(7) D
814	814	ENIAL OF BENEFITS FOR CERTAIN PAY -22
815	815	MENTS THROUGH HYBRID ENTITIES .—For purposes 23
816	816	of this section, rules similar to the rules of section 24
817	817	894(c) shall apply. 25
818	818	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
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820	820	•S 199 IS
821	821	‘‘(e) APPLICATION.— 1
822	822	‘‘(1) I
823	823	N GENERAL.—This section shall not apply 2
824	824	to any period unless the Secretary has determined 3
825	825	that Taiwan has provided benefits to United States 4
826	826	persons for such period that are reciprocal to the 5
827	827	benefits provided to qualified residents of Taiwan 6
828	828	under this section. 7
829	829	‘‘(2) P
830	830	ROVISION OF RECIPROCITY .—The Presi-8
831	831	dent or his designee is authorized to exchange let-9
832	832	ters, enter into an agreement, or take other nec-10
833	833	essary and appropriate steps relative to Taiwan for 11
834	834	the reciprocal provision of the benefits described in 12
835	835	this section. 13
836	836	‘‘(f) R
837	837	EGULATIONS OROTHERGUIDANCE.— 14
838	838	‘‘(1) I
839	839	N GENERAL.—The Secretary shall issue 15
840	840	such regulations or other guidance as may be nec-16
841	841	essary or appropriate to carry out the provisions of 17
842	842	this section, including such regulations or guidance 18
843	843	for— 19
844	844	‘‘(A) determining— 20
845	845	‘‘(i) what constitutes a United States 21
846	846	permanent establishment of a qualified 22
847	847	resident of Taiwan, and 23
848	848	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
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850	850	•S 199 IS
851	851	‘‘(ii) income that is effectively con-1
852	852	nected with such a permanent establish-2
853	853	ment, 3
854	854	‘‘(B) preventing the abuse of the provisions 4
855	855	of this section by persons who are not (or who 5
856	856	should not be treated as) qualified residents of 6
857	857	Taiwan, 7
858	858	‘‘(C) requirements for record keeping and 8
859	859	reporting, 9
860	860	‘‘(D) rules to assist withholding agents or 10
861	861	employers in determining whether a foreign per-11
862	862	son is a qualified resident of Taiwan for pur-12
863	863	poses of determining whether withholding or re-13
864	864	porting is required for a payment (and, if with-14
865	865	holding is required, whether it should be applied 15
866	866	at a reduced rate), 16
867	867	‘‘(E) the application of subsection 17
868	868	(a)(1)(D)(i) to stock held by predecessor own-18
869	869	ers, 19
870	870	‘‘(F) determining what amounts are to be 20
871	871	treated as qualified wages for purposes of sub-21
872	872	section (a)(2), 22
873	873	‘‘(G) determining the amounts to which 23
874	874	subsection (a)(3) applies, 24
875	875	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00029 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
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877	877	•S 199 IS
878	878	‘‘(H) defining established securities market 1
879	879	for purposes of subsection (c), 2
880	880	‘‘(I) the application of the rules of sub-3
881	881	section (c)(4)(B), 4
882	882	‘‘(J) the application of subsection (d)(6) 5
883	883	and section 1446, 6
884	884	‘‘(K) determining ownership interests held 7
885	885	by residents of a foreign country of concern, 8
886	886	and 9
887	887	‘‘(L) determining the starting and ending 10
888	888	dates for periods with respect to the application 11
889	889	of this section under subsection (e), which may 12
890	890	be separate dates for taxes withheld at the 13
891	891	source and other taxes. 14
892	892	‘‘(2) R
893	893	EGULATIONS TO BE CONSISTENT WITH 15
894	894	MODEL TREATY.—Any regulations or other guidance 16
895	895	issued under this section shall, to the extent prac-17
896	896	tical, be consistent with the provisions of the United 18
897	897	States model income tax convention dated February 19
898	898	7, 2016.’’. 20
899	899	(b) C
900	900	ONFORMINGAMENDMENT TO WITHHOLDING 21
901	901	T
902	902	AX.—Subchapter A of chapter 3 of the Internal Revenue 22
903	903	Code of 1986 is amended by adding at the end the fol-23
904	904	lowing new section: 24
905	905	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
906	906	kjohnson on DSK7ZCZBW3PROD with $$_JOB 31
907	907	•S 199 IS
908	908	‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 1
909	909	TAIWAN. 2
910	910	‘‘For reduced rates of withholding for certain resi-3
911	911	dents of Taiwan, see section 894A.’’. 4
912	912	(c) C
913	913	LERICALAMENDMENTS.— 5
914	914	(1) The table of sections for subpart D of part 6
915	915	II of subchapter N of chapter 1 of the Internal Rev-7
916	916	enue Code of 1986 is amended by inserting after the 8
917	917	item relating to section 894 the following new item: 9
918	918	‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’.
919	919	(2) The table of sections for subchapter A of 10
920	920	chapter 3 of such Code is amended by adding at the 11
921	921	end the following new item: 12
922	922	‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’.
923	923	TITLE II—UNITED STATES-TAI-13
924	924	WAN TAX AGREEMENT AU-14
925	925	THORIZATION ACT 15
926	926	SEC. 201. SHORT TITLE. 16
927	927	This title may be cited as the ‘‘United States-Taiwan 17
928	928	Tax Agreement Authorization Act’’. 18
929	929	SEC. 202. DEFINITIONS. 19
930	930	In this title: 20
931	931	(1) A
932	932	GREEMENT.—The term ‘‘Agreement’’ 21
933	933	means the tax agreement authorized by section 22
934	934	203(a). 23
935	935	VerDate Sep 11 2014 02:56 Feb 19, 2025 Jkt 059200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S199.IS S199
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937	937	•S 199 IS
938	938	(2) APPROPRIATE CONGRESSIONAL COMMIT -1
939	939	TEES.—The term ‘‘appropriate congressional com-2
940	940	mittees’’ means— 3
941	941	(A) the Committee on Foreign Relations 4
942	942	and the Committee on Finance of the Senate; 5
943	943	and 6
944	944	(B) the Committee on Ways and Means of 7
945	945	the House of Representatives. 8
946	946	(3) A
947	947	PPROVAL LEGISLATION .—The term ‘‘ap-9
948	948	proval legislation’’ means legislation that approves 10
949	949	the Agreement. 11
950	950	(4) I
951	951	MPLEMENTING LEGISLATION .—The term 12
952	952	‘‘implementing legislation’’ means legislation that 13
953	953	makes any changes to the Internal Revenue Code of 14
954	954	1986 necessary to implement the Agreement. 15
955	955	SEC. 203. AUTHORIZATION TO NEGOTIATE AND ENTER 16
956	956	INTO AGREEMENT. 17
957	957	(a) I
958	958	NGENERAL.—Subsequent to a determination 18
959	959	under section 894A(e)(1) of the Internal Revenue Code 19
960	960	of 1986 (as added by the United States-Taiwan Expedited 20
961	961	Double-Tax Relief Act), the President is authorized to ne-21
962	962	gotiate and enter into a tax agreement relative to Taiwan. 22
963	963	(b) E
964	964	LEMENTS OFAGREEMENT.— 23
965	965	(1) C
966	966	ONFORMITY WITH BILATERAL INCOME TAX 24
967	967	CONVENTIONS.—The President shall ensure that— 25
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970	970	•S 199 IS
971	971	(A) any provisions included in the Agree-1
972	972	ment conform with provisions customarily con-2
973	973	tained in United States bilateral income tax 3
974	974	conventions, as exemplified by the 2016 United 4
975	975	States Model Income Tax Convention; and 5
976	976	(B) the Agreement does not include ele-6
977	977	ments outside the scope of the 2016 United 7
978	978	States Model Income Tax Convention. 8
979	979	(2) I
980	980	NCORPORATION OF TAX AGREEMENTS AND 9
981	981	LAWS.—Notwithstanding paragraph (1), the Agree-10
982	982	ment may incorporate and restate provisions of any 11
983	983	agreement, or existing United States law, addressing 12
984	984	double taxation for residents of the United States 13
985	985	and Taiwan. 14
986	986	(3) A
987	987	UTHORITY.—The Agreement shall include 15
988	988	the following statement: ‘‘The Agreement is entered 16
989	989	into pursuant to the United States-Taiwan Tax 17
990	990	Agreement Authorization Act.’’ 18
991	991	(4) E
992	992	NTRY INTO FORCE.—The Agreement shall 19
993	993	include a provision conditioning entry into force 20
994	994	upon— 21
995	995	(A) enactment of approval legislation and 22
996	996	implementing legislation pursuant to section 23
997	997	207; and 24
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1000	1000	•S 199 IS
1001	1001	(B) confirmation by the Secretary of the 1
1002	1002	Treasury that the relevant authority in Taiwan 2
1003	1003	has approved and taken appropriate steps re-3
1004	1004	quired to implement the Agreement. 4
1005	1005	SEC. 204. CONSULTATIONS WITH CONGRESS. 5
1006	1006	(a) N
1007	1007	OTIFICATIONUPONCOMMENCEMENT OF NEGO-6
1008	1008	TIATIONS.—The President shall provide written notifica-7
1009	1009	tion to the appropriate congressional committees of the 8
1010	1010	commencement of negotiations between the United States 9
1011	1011	and Taiwan on the Agreement at least 15 calendar days 10
1012	1012	before commencing such negotiations. 11
1013	1013	(b) C
1014	1014	ONSULTATIONSDURINGNEGOTIATIONS.— 12
1015	1015	(1) B
1016	1016	RIEFINGS.—Not later than 90 days after 13
1017	1017	commencement of negotiations with respect to the 14
1018	1018	Agreement, and every 180 days thereafter until the 15
1019	1019	President enters into the Agreement, the President 16
1020	1020	shall provide a briefing to the appropriate congres-17
1021	1021	sional committees on the status of the negotiations, 18
1022	1022	including a description of elements under negotia-19
1023	1023	tion. 20
1024	1024	(2) M
1025	1025	EETINGS AND OTHER CONSULTATIONS .— 21
1026	1026	(A) I
1027	1027	N GENERAL.—In the course of nego-22
1028	1028	tiations with respect to the Agreement, the Sec-23
1029	1029	retary of the Treasury, in coordination with the 24
1030	1030	Secretary of State, shall— 25
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1033	1033	•S 199 IS
1034	1034	(i) meet, upon request, with the chair-1
1035	1035	man or ranking member of any of the ap-2
1036	1036	propriate congressional committees regard-3
1037	1037	ing negotiating objectives and the status of 4
1038	1038	negotiations in progress; and 5
1039	1039	(ii) consult closely and on a timely 6
1040	1040	basis with, and keep fully apprised of the 7
1041	1041	negotiations, the appropriate congressional 8
1042	1042	committees. 9
1043	1043	(B) E
1044	1044	LEMENTS OF CONSULTATIONS .—The 10
1045	1045	consultations described in subparagraph (A) 11
1046	1046	shall include consultations with respect to— 12
1047	1047	(i) the nature of the contemplated 13
1048	1048	Agreement; 14
1049	1049	(ii) how and to what extent the con-15
1050	1050	templated Agreement is consistent with the 16
1051	1051	elements set forth in section 203(b); and 17
1052	1052	(iii) the implementation of the con-18
1053	1053	templated Agreement, including— 19
1054	1054	(I) the general effect of the con-20
1055	1055	templated Agreement on existing laws; 21
1056	1056	(II) proposed changes to any ex-22
1057	1057	isting laws to implement the con-23
1058	1058	templated Agreement; and 24
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1061	1061	•S 199 IS
1062	1062	(III) proposed administrative ac-1
1063	1063	tions to implement the contemplated 2
1064	1064	Agreement. 3
1065	1065	SEC. 205. APPROVAL AND IMPLEMENTATION OF AGREE-4
1066	1066	MENT. 5
1067	1067	(a) I
1068	1068	NGENERAL.—The Agreement may not enter 6
1069	1069	into force unless— 7
1070	1070	(1) the President, at least 60 days before the 8
1071	1071	day on which the President enters into the Agree-9
1072	1072	ment, publishes the text of the contemplated Agree-10
1073	1073	ment on a publicly available website of the Depart-11
1074	1074	ment of the Treasury; and 12
1075	1075	(2) there is enacted into law, with respect to 13
1076	1076	the Agreement, approval legislation and imple-14
1077	1077	menting legislation pursuant to section 207. 15
1078	1078	(b) E
1079	1079	NTRYINTOFORCE.—The President may pro-16
1080	1080	vide for the Agreement to enter into force upon— 17
1081	1081	(1) enactment of approval legislation and imple-18
1082	1082	menting legislation pursuant to section 207; and 19
1083	1083	(2) confirmation by the Secretary of the Treas-20
1084	1084	ury that the relevant authority in Taiwan has ap-21
1085	1085	proved and taken appropriate steps required to im-22
1086	1086	plement the Agreement. 23
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1089	1089	•S 199 IS
1090	1090	SEC. 206. SUBMISSION TO CONGRESS OF AGREEMENT AND 1
1091	1091	IMPLEMENTATION POLICY. 2
1092	1092	(a) S
1093	1093	UBMISSION OFAGREEMENT.—Not later than 3
1094	1094	270 days after the President enters into the Agreement, 4
1095	1095	the President or the President’s designee shall submit to 5
1096	1096	Congress— 6
1097	1097	(1) the final text of the Agreement; and 7
1098	1098	(2) a technical explanation of the Agreement. 8
1099	1099	(b) S
1100	1100	UBMISSION OFIMPLEMENTATION POLICY.—Not 9
1101	1101	later than 270 days after the President enters into the 10
1102	1102	Agreement, the Secretary of the Treasury shall submit to 11
1103	1103	Congress— 12
1104	1104	(1) a description of those changes to existing 13
1105	1105	laws that the President considers would be required 14
1106	1106	in order to ensure that the United States acts in a 15
1107	1107	manner consistent with the Agreement; and 16
1108	1108	(2) a statement of anticipated administrative 17
1109	1109	action proposed to implement the Agreement. 18
1110	1110	SEC. 207. CONSIDERATION OF APPROVAL LEGISLATION 19
1111	1111	AND IMPLEMENTING LEGISLATION. 20
1112	1112	(a) I
1113	1113	NGENERAL.—The approval legislation with re-21
1114	1114	spect to the Agreement shall include the following: ‘‘Con-22
1115	1115	gress approves the Agreement submitted to Congress pur-23
1116	1116	suant to section 206 of the United States-Taiwan Tax 24
1117	1117	Agreement Authorization Act on llll.’’, with the 25
1118	1118	blank space being filled with the appropriate date. 26
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1121	1121	•S 199 IS
1122	1122	(b) APPROVALLEGISLATIONCOMMITTEEREFER-1
1123	1123	RAL.—The approval legislation shall— 2
1124	1124	(1) in the Senate, be referred to the Committee 3
1125	1125	on Foreign Relations; and 4
1126	1126	(2) in the House of Representatives, be referred 5
1127	1127	to the Committee on Ways and Means. 6
1128	1128	(c) I
1129	1129	MPLEMENTING LEGISLATIONCOMMITTEERE-7
1130	1130	FERRAL.—The implementing legislation shall— 8
1131	1131	(1) in the Senate, be referred to the Committee 9
1132	1132	on Finance; and 10
1133	1133	(2) in the House of Representatives, be referred 11
1134	1134	to the Committee on Ways and Means. 12
1135	1135	SEC. 208. RELATIONSHIP OF AGREEMENT TO INTERNAL 13
1136	1136	REVENUE CODE OF 1986. 14
1137	1137	(a) I
1138	1138	NTERNALREVENUECODE OF1986 TOCON-15
1139	1139	TROL.—No provision of the Agreement or approval legisla-16
1140	1140	tion, nor the application of any such provision to any per-17
1141	1141	son or circumstance, which is inconsistent with any provi-18
1142	1142	sion of the Internal Revenue Code of 1986, shall have ef-19
1143	1143	fect. 20
1144	1144	(b) C
1145	1145	ONSTRUCTION.—Nothing in this title shall be 21
1146	1146	construed— 22
1147	1147	(1) to amend or modify any law of the United 23
1148	1148	States; or 24
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1151	1151	•S 199 IS
1152	1152	(2) to limit any authority conferred under any 1
1153	1153	law of the United States, unless specifically provided 2
1154	1154	for in this title. 3
1155	1155	SEC. 209. AUTHORIZATION OF SUBSEQUENT TAX AGREE-4
1156	1156	MENTS RELATIVE TO TAIWAN. 5
1157	1157	(a) I
1158	1158	NGENERAL.—Subsequent to the enactment of 6
1159	1159	approval legislation and implementing legislation pursuant 7
1160	1160	to section 207— 8
1161	1161	(1) the term ‘‘tax agreement’’ in section 203(a) 9
1162	1162	shall be treated as including any tax agreement rel-10
1163	1163	ative to Taiwan which supplements or supersedes 11
1164	1164	the Agreement to which such approval legislation 12
1165	1165	and implementing legislation relates; and 13
1166	1166	(2) the term ‘‘Agreement’’ shall be treated as 14
1167	1167	including such tax agreement. 15
1168	1168	(b) R
1169	1169	EQUIREMENTS, ETC., TOAPPLYSEPA-16
1170	1170	RATELY.—The provisions of this title (including section 17
1171	1171	204) shall be applied separately with respect to each tax 18
1172	1172	agreement referred to in subsection (a). 19
1173	1173	SEC. 210. UNITED STATES TREATMENT OF DOUBLE TAX-20
1174	1174	ATION MATTERS WITH RESPECT TO TAIWAN. 21
1175	1175	(a) F
1176	1176	INDINGS.—Congress makes the following find-22
1177	1177	ings: 23
1178	1178	(1) The United States addresses issues with re-24
1179	1179	spect to double taxation with foreign countries by 25
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1182	1182	•S 199 IS
1183	1183	entering into bilateral income tax conventions 1
1184	1184	(known as tax treaties) with such countries, subject 2
1185	1185	to the advice and consent of the Senate to ratifica-3
1186	1186	tion pursuant to article II of the Constitution. 4
1187	1187	(2) The United States has entered into more 5
1188	1188	than sixty such tax treaties, which facilitate eco-6
1189	1189	nomic activity, strengthen bilateral cooperation, and 7
1190	1190	benefit United States workers, businesses, and other 8
1191	1191	United States taxpayers. 9
1192	1192	(3) Due to Taiwan’s unique status, the United 10
1193	1193	States is unable to enter into an article II tax treaty 11
1194	1194	with Taiwan, necessitating an agreement to address 12
1195	1195	issues with respect to double taxation. 13
1196	1196	(b) S
1197	1197	TATEMENT OFPOLICY.—It is the policy of the 14
1198	1198	United States to— 15
1199	1199	(1) provide for additional bilateral tax relief 16
1200	1200	with respect to Taiwan, beyond that provided for in 17
1201	1201	section 894A of the Internal Revenue Code of 1986 18
1202	1202	(as added by the United States-Taiwan Expedited 19
1203	1203	Double-Tax Relief Act), only after entry into force 20
1204	1204	of an Agreement, as provided for in section 205, and 21
1205	1205	only in a manner consistent with such Agreement; 22
1206	1206	and 23
1207	1207	(2) continue to provide for bilateral tax relief 24
1208	1208	with sovereign states to address double taxation and 25
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1211	1211	•S 199 IS
1212	1212	other related matters through entering into bilateral 1
1213	1213	income tax conventions, subject to the Senate’s ad-2
1214	1214	vice and consent to ratification pursuant to article II 3
1215	1215	of the Constitution. 4
1216	1216	Æ
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