The Taiwan Tax Agreement Act marks a step in US lawmakers’ efforts to call on Washington to address the tax issue with Taipei, after the US Senate reached a similar resolution in March. If Taipei and Washington can sign a tax agreement, the estimated withholding tax rate could be reduced, and Taiwanese and US businesses can avoid being double-taxed. A comprehensive tax agreement also includes clauses on exchanges of tax information, dispute resolution and combating tax evasion. If Taipei and Washington sign a tax agreement, Taiwan could also obtain tax information on Taiwanese in the US, as it would have a reciprocity mechanism. Considering the benefits of easing the tax burden and increasing information transparency, a bilateral tax agreement would create a win-win situation for Taiwan and the US.

Source: Taipei Times May 14, 2023 16:59 UTC