US House of Representatives passes US-Taiwan Double Taxation Relief Bill
US House Passes Bill to Prevent Double Taxation for Taiwan
The US House of Representatives has passed a bill called the United States-Taiwan Expedited Double-Tax Relief Act on January 15. This bill aims to reduce tax payments and prevent double taxation for Taiwanese businesses, residents, and employees in the US. It was passed with a 423-1 vote and will now proceed to the US Senate for approval. If the Senate approves, it will be sent to the President to be signed into law.
Key Features of the Bill
The bill seeks to amend current US tax laws to provide tax exemptions for eligible Taiwanese residents in the US. It also aims to lower withholding tax rates on income from specific sources like dividends and interest. Additionally, it would authorize the US President to negotiate and enter into a tax agreement with Taiwan.
Statements from Representatives
Representative Judy Chu highlighted that the current laws require Americans doing business in Taiwan to pay income tax in both countries, which affects businesses negatively. She noted that Taiwan is the only top 10 US trading partner without a double tax agreement. A survey by the American Institute in Taiwan showed that 79% of Taiwanese companies consider double taxation a significant barrier to investing more in the US.
Representative Jason Smith, chair of the Ways and Means Committee, stated that Taiwan is America's eighth-largest trading partner but lacks an income tax treaty with the US. He emphasized that the new bill promotes economic efficiency, strengthens the strategic partnership with Taiwan, and supports long-term economic stability.
Doubts Revealed
US House of Representatives
The US House of Representatives is one of the two parts of the United States Congress, where laws are made. It is similar to the Lok Sabha in India.
Double Taxation
Double taxation means paying taxes twice on the same income. This can happen when people or businesses earn money in one country but live in another.
Taiwan
Taiwan is an island country in East Asia, near China. It has its own government and economy, separate from China.
Bill
A bill is a proposal for a new law. It needs to be approved by lawmakers and signed by the President to become a law.
Senate
The Senate is the other part of the United States Congress, like the Rajya Sabha in India. It also helps make laws.
Withholding Tax
Withholding tax is money taken from someone's income by the government before they receive it. It is like TDS (Tax Deducted at Source) in India.
Judy Chu and Jason Smith
Judy Chu and Jason Smith are members of the US House of Representatives. They support the bill to help improve economic ties with Taiwan.
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