IIB 

119TH CONGRESS 

1ST SESSION H. R. 33 

IN THE SENATE OF THE UNITED STATES 

JANUARY 16, 2025 

Received; read twice and referred to the Committee on Finance 

AN ACT 

To amend the Internal Revenue Code of 1986 to provide 

special rules for the taxation of certain residents of Taiwan with income from sources within the United States. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 


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1 TITLE I—UNITED STATES-TAI2 WAN EXPEDITED DOUBLE3 TAX RELIEF ACT 

4 SEC. 101. SHORT TITLE. 

5 This title may be cited as the ‘‘United States-Taiwan 

6 Expedited Double-Tax Relief Act’’. 

7 SEC. 102. SPECIAL RULES FOR TAXATION OF CERTAIN 

8 RESIDENTS OF TAIWAN. 

9 (a) IN GENERAL.—Subpart D of part II of sub10 chapter N of chapter 1 of the Internal Revenue Code of 

11 1986 is amended by inserting after section 894 the fol12 lowing new section: 

13 ‘‘SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF 

14 TAIWAN. 

15 ‘‘(a) CERTAIN INCOME FROM UNITED STATES

16 SOURCES.— 

17 ‘‘(1) INTEREST, DIVIDENDS, AND ROYALTIES, 

18 ETC.— 

19 ‘‘(A) IN GENERAL.—In the case of interest 

20 (other than original issue discount), dividends, 

21 royalties, amounts described in section 

22 871(a)(1)(C), and gains described in section 

23 871(a)(1)(D) received by or paid to a qualified 

24 resident of Taiwan— 


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1 ‘‘(i) sections 871(a), 881(a), 1441(a), 

2 1441(c)(5), and 1442(a) shall each be ap3 plied by substituting ‘the applicable per4 centage (as defined in section 

5 894A(a)(1)(C))’ for ‘30 percent’ each place 

6 it appears, and 

7 ‘‘(ii) sections 871(a), 881(a), and 

8 1441(c)(1) shall each be applied by sub9 stituting ‘a United States permanent es10 tablishment of a qualified resident of Tai11 wan’ for ‘a trade or business within the 

12 United States’ each place it appears. 

13 ‘‘(B) EXCEPTIONS.— 

14 ‘‘(i) IN GENERAL.—Subparagraph (A) 

15 shall not apply to— 

16 ‘‘(I) any dividend received from 

17 or paid by a real estate investment 

18 trust which is not a qualified REIT 

19 dividend, 

20 ‘‘(II) any amount subject to sec21 tion 897, 

22 ‘‘(III) any amount received from 

23 or paid by an expatriated entity (as 

24 defined in section 7874(a)(2)) to a 


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1 foreign related person (as defined in 

2 section 7874(d)(3)), and 

3 ‘‘(IV) any amount which is in4 cluded in income under section 860C 

5 to the extent that such amount does 

6 not exceed an excess inclusion with re7 spect to a REMIC. 

8 ‘‘(ii) QUALIFIED REIT DIVIDEND.— 

9 For purposes of clause (i)(I), the term 

10 ‘qualified REIT dividend’ means any divi11 dend received from or paid by a real estate 

12 investment trust if such dividend is paid 

13 with respect to a class of shares that is 

14 publicly traded and the recipient of the 

15 dividend is a person who holds an interest 

16 in any class of shares of the real estate in17 vestment trust of not more than 5 percent. 

18 ‘‘(C) APPLICABLE PERCENTAGE.—For 

19 purposes of applying subparagraph (A)(i)— 

20 ‘‘(i) IN GENERAL.—Except as pro21 vided in clause (ii), the term ‘applicable 

22 percentage’ means 10 percent. 

23 ‘‘(ii) SPECIAL RULES FOR DIVI24 DENDS.— In the case of any dividend in 

25 respect of stock received by or paid to a 


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1 qualified resident of Taiwan, the applicable 

2 percentage shall be 15 percent (10 percent 

3 in the case of a dividend which meets the 

4 requirements of subparagraph (D) and is 

5 received by or paid to an entity taxed as 

6 a corporation in Taiwan). 

7 ‘‘(D) REQUIREMENTS FOR LOWER DIVI8 DEND RATE.— 

9 ‘‘(i) IN GENERAL.—The requirements 

10 of this subparagraph are met with respect 

11 to any dividend in respect of stock in a 

12 corporation if, at all times during the 12- 

13 month period ending on the date such 

14 stock becomes ex-dividend with respect to 

15 such dividend— 

16 ‘‘(I) the dividend is derived by a 

17 qualified resident of Taiwan, and 

18 ‘‘(II) such qualified resident of 

19 Taiwan has held directly at least 10 

20 percent (by vote and value) of the 

21 total outstanding shares of stock in 

22 such corporation. 

23 For purposes of subclause (II), a person 

24 shall be treated as directly holding a share 

25 of stock during any period described in the 


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1 preceding sentence if the share was held by 

2 a corporation from which such person later 

3 acquired that share and such corporation 

4 was, at the time the share was acquired, 

5 both a connected person to such person 

6 and a qualified resident of Taiwan. 

7 ‘‘(ii) EXCEPTION FOR RICS AND

8 REITS.—Notwithstanding clause (i), the re9 quirements of this subparagraph shall not 

10 be treated as met with respect to any divi11 dend paid by a regulated investment com12 pany or a real estate investment trust. 

13 ‘‘(2) QUALIFIED WAGES.— 

14 ‘‘(A) IN GENERAL.—No tax shall be im15 posed under this chapter (and no amount shall 

16 be withheld under section 1441(a) or chapter 

17 24) with respect to qualified wages paid to a 

18 qualified resident of Taiwan who— 

19 ‘‘(i) is not a resident of the United 

20 States (determined without regard to sub21 section (c)(3)(E)), or 

22 ‘‘(ii) is employed as a member of the 

23 regular component of a ship or aircraft op24 erated in international traffic. 

25 ‘‘(B) QUALIFIED WAGES.— 


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1 ‘‘(i) IN GENERAL.—The term ‘quali2 fied wages’ means wages, salaries, or simi3 lar remunerations with respect to employ4 ment involving the performance of personal 

5 services within the United States which— 

6 ‘‘(I) are paid by (or on behalf of) 

7 any employer other than a United 

8 States person, and 

9 ‘‘(II) are not borne by a United 

10 States permanent establishment of 

11 any person other than a United States 

12 person. 

13 ‘‘(ii) EXCEPTIONS.—Such term shall 

14 not include directors’ fees, income derived 

15 as an entertainer or athlete, income de16 rived as a student or trainee, pensions, 

17 amounts paid with respect to employment 

18 with the United States, any State (or polit19 ical subdivision thereof), or any possession 

20 of the United States (or any political sub21 division thereof), or other amounts speci22 fied in regulations or guidance under sub23 section (f)(1)(F). 

24 ‘‘(3) INCOME DERIVED FROM ENTERTAINMENT

25 OR ATHLETIC ACTIVITIES.— 


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1 ‘‘(A) IN GENERAL.—No tax shall be im2 posed under this chapter (and no amount shall 

3 be withheld under section 1441(a) or chapter 

4 24) with respect to income derived by an enter5 tainer or athlete who is a qualified resident of 

6 Taiwan from personal activities as such per7 formed in the United States if the aggregate 

8 amount of gross receipts from such activities 

9 for the taxable year do not exceed $30,000. 

10 ‘‘(B) EXCEPTION.—Subparagraph (A) 

11 shall not apply with respect to— 

12 ‘‘(i) income which is qualified wages 

13 (as defined in paragraph (2)(B), deter14 mined without regard to clause (ii) there15 of), or 

16 ‘‘(ii) income which is effectively con17 nected with a United States permanent es18 tablishment. 

19 ‘‘(b) INCOME CONNECTED WITH A UNITED STATES

20 PERMANENT ESTABLISHMENT OF A QUALIFIED RESI21 DENT OF TAIWAN.— 

22 ‘‘(1) IN GENERAL.— 

23 ‘‘(A) IN GENERAL.—In lieu of applying 

24 sections 871(b) and 882, a qualified resident of 

25 Taiwan that carries on a trade or business 


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1 within the United States through a United 

2 States permanent establishment shall be taxable 

3 as provided in section 1, 11, 55, or 59A, on its 

4 taxable income which is effectively connected 

5 with such permanent establishment. 

6 ‘‘(B) DETERMINATION OF TAXABLE IN7 COME.—In determining taxable income for pur8 poses of paragraph (1), gross income includes 

9 only gross income which is effectively connected 

10 with the permanent establishment. 

11 ‘‘(2) TREATMENT OF DISPOSITIONS OF UNITED

12 STATES REAL PROPERTY.—In the case of a qualified 

13 resident of Taiwan, section 897(a) shall be applied— 

14 ‘‘(A) by substituting ‘carried on a trade or 

15 business within the United States through a 

16 United States permanent establishment’ for 

17 ‘were engaged in a trade or business within the 

18 United States’, and 

19 ‘‘(B) by substituting ‘such United States 

20 permanent establishment’ for ‘such trade or 

21 business’. 

22 ‘‘(3) TREATMENT OF BRANCH PROFITS

23 TAXES.—In the case of any corporation which is a 

24 qualified resident of Taiwan, section 884 shall be ap25 plied— 


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1 ‘‘(A) by substituting ‘10 percent’ for ‘30 

2 percent’ in subsection (a) thereof, and 

3 ‘‘(B) by substituting ‘a United States per4 manent establishment of a qualified resident of 

5 Taiwan’ for ‘the conduct of a trade or business 

6 within the United States’ in subsection (d)(1) 

7 thereof. 

8 ‘‘(4) SPECIAL RULE WITH RESPECT TO INCOME

9 DERIVED FROM CERTAIN ENTERTAINMENT OR ATH10 LETIC ACTIVITIES.— 

11 ‘‘(A) IN GENERAL.—Paragraph (1) shall 

12 not apply to the extent that the income is de13 rived— 

14 ‘‘(i) in respect of entertainment or 

15 athletic activities performed in the United 

16 States, and 

17 ‘‘(ii) by a qualified resident of Taiwan 

18 who is not the entertainer or athlete per19 forming such activities. 

20 ‘‘(B) EXCEPTION.—Subparagraph (A) 

21 shall not apply if the person described in sub22 paragraph (A)(ii) is contractually authorized to 

23 designate the individual who is to perform such 

24 activities. 


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1 ‘‘(5) SPECIAL RULE WITH RESPECT TO CER2 TAIN AMOUNTS.—Paragraph (1) shall not apply to 

3 any income which is wages, salaries, or similar re4 muneration with respect to employment or with re5 spect to any amount which is described in subsection 

6 (a)(2)(B)(ii). 

7 ‘‘(c) QUALIFIED RESIDENT OF TAIWAN.—For pur8 poses of this section— 

9 ‘‘(1) IN GENERAL.—The term ‘qualified resi10 dent of Taiwan’ means any person who— 

11 ‘‘(A) is liable to tax under the laws of Tai12 wan by reason of such person’s domicile, resi13 dence, place of management, place of incorpora14 tion, or any similar criterion, 

15 ‘‘(B) is not a United States person (deter16 mined without regard to paragraph (3)(E)), 

17 and 

18 ‘‘(C) in the case of an entity taxed as a 

19 corporation in Taiwan, meets the requirements 

20 of paragraph (2). 

21 ‘‘(2) LIMITATION ON BENEFITS FOR COR22 PORATE ENTITIES OF TAIWAN.— 

23 ‘‘(A) IN GENERAL.—Subject to subpara24 graphs (E) and (F), an entity meets the re25 quirements of this paragraph only if it— 


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1 ‘‘(i) meets the ownership and income 

2 requirements of subparagraph (B), 

3 ‘‘(ii) meets the publicly traded re4 quirements of subparagraph (C), or 

5 ‘‘(iii) meets the qualified subsidiary 

6 requirements of subparagraph (D). 

7 ‘‘(B) OWNERSHIP AND INCOME REQUIRE8 MENTS.—The requirements of this subpara9 graph are met for an entity if— 

10 ‘‘(i) at least 50 percent (by vote and 

11 value) of the total outstanding shares of 

12 stock in such entity are owned directly or 

13 indirectly by qualified residents of Taiwan, 

14 and 

15 ‘‘(ii) less than 50 percent of such enti16 ty’s gross income (and in the case of an 

17 entity that is a member of a tested group, 

18 less than 50 percent of the tested group’s 

19 gross income) is paid or accrued, directly 

20 or indirectly, in the form of payments that 

21 are deductible for purposes of the income 

22 taxes imposed by Taiwan, to persons who 

23 are not— 

24 ‘‘(I) qualified residents of Tai25 wan, or 


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1 ‘‘(II) United States persons who 

2 meet such requirements with respect 

3 to the United States as determined by 

4 the Secretary to be equivalent to the 

5 requirements of this subsection (deter6 mined without regard to paragraph 

7 (1)(B)) with respect to residents of 

8 Taiwan. 

9 ‘‘(C) PUBLICLY TRADED REQUIRE10 MENTS.—An entity meets the requirements of 

11 this subparagraph if— 

12 ‘‘(i) the principal class of its shares 

13 (and any disproportionate class of shares) 

14 of such entity are primarily and regularly 

15 traded on an established securities market 

16 in Taiwan, or 

17 ‘‘(ii) the primary place of manage18 ment and control of the entity is in Taiwan 

19 and all classes of its outstanding shares 

20 described in clause (i) are regularly traded 

21 on an established securities market in Tai22 wan. 

23 ‘‘(D) QUALIFIED SUBSIDIARY REQUIRE24 MENTS.—An entity meets the requirement of 

25 this subparagraph if— 


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1 ‘‘(i) at least 50 percent (by vote and 

2 value) of the total outstanding shares of 

3 the stock of such entity are owned directly 

4 or indirectly by 5 or fewer entities— 

5 ‘‘(I) which meet the requirements 

6 of subparagraph (C), or 

7 ‘‘(II) which are United States 

8 persons the principal class of the 

9 shares (and any disproportionate class 

10 of shares) of which are primarily and 

11 regularly traded on an established se12 curities market in the United States, 

13 and 

14 ‘‘(ii) the entity meets the require15 ments of clause (ii) of subparagraph (B). 

16 ‘‘(E) ONLY INDIRECT OWNERSHIP

17 THROUGH QUALIFYING INTERMEDIARIES

18 COUNTED.— 

19 ‘‘(i) IN GENERAL.—Stock in an entity 

20 owned by a person indirectly through 1 or 

21 more other persons shall not be treated as 

22 owned by such person in determining 

23 whether the person meets the requirements 

24 of subparagraph (B)(i) or (D)(i) unless all 


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1 such other persons are qualifying inter2 mediate owners. 

3 ‘‘(ii) QUALIFYING INTERMEDIATE

4 OWNERS.—The term ‘qualifying inter5 mediate owner’ means a person that is— 

6 ‘‘(I) a qualified resident of Tai7 wan, or 

8 ‘‘(II) a resident of any other for9 eign country (other than a foreign 

10 country that is a foreign country of 

11 concern) that has in effect a com12 prehensive convention with the United 

13 States for the avoidance of double tax14 ation. 

15 ‘‘(iii) SPECIAL RULE FOR QUALIFIED

16 SUBSIDIARIES.—For purposes of applying 

17 subparagraph (D)(i), the term ‘qualifying 

18 intermediate owner’ shall include any per19 son who is a United States person who 

20 meets such requirements with respect to 

21 the United States as determined by the 

22 Secretary to be equivalent to the require23 ments of this subsection (determined with24 out regard to paragraph (1)(B)) with re25 spect to residents of Taiwan. 


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1 ‘‘(F) CERTAIN PAYMENTS NOT IN2 CLUDED.—In determining whether the require3 ments of subparagraph (B)(ii) or (D)(ii) are 

4 met with respect to an entity, the following pay5 ments shall not be taken into account: 

6 ‘‘(i) Arm’s-length payments by the en7 tity in the ordinary course of business for 

8 services or tangible property. 

9 ‘‘(ii) In the case of a tested group, 

10 intra-group transactions. 

11 ‘‘(3) DUAL RESIDENTS.— 

12 ‘‘(A) RULES FOR DETERMINATION OF STA13 TUS.— 

14 ‘‘(i) IN GENERAL.—An individual who 

15 is an applicable dual resident and who is 

16 described in subparagraph (B), (C), or (D) 

17 shall be treated as a qualified resident of 

18 Taiwan. 

19 ‘‘(ii) APPLICABLE DUAL RESIDENT.— 

20 For purposes of this paragraph, the term 

21 ‘applicable dual resident’ means an indi22 vidual who— 

23 ‘‘(I) is not a United States cit24 izen, 


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1 ‘‘(II) is a resident of the United 

2 States (determined without regard to 

3 subparagraph (E)), and 

4 ‘‘(III) would be a qualified resi5 dent of Taiwan but for paragraph 

6 (1)(B). 

7 ‘‘(B) PERMANENT HOME.—An individual 

8 is described in this subparagraph if such indi9 vidual— 

10 ‘‘(i) has a permanent home available 

11 to such individual in Taiwan, and 

12 ‘‘(ii) does not have a permanent home 

13 available to such individual in the United 

14 States. 

15 ‘‘(C) CENTER OF VITAL INTERESTS.—An 

16 individual is described in this subparagraph if— 

17 ‘‘(i) such individual has a permanent 

18 home available to such individual in both 

19 Taiwan and the United States, and 

20 ‘‘(ii) such individual’s personal and 

21 economic relations (center of vital inter22 ests) are closer to Taiwan than to the 

23 United States. 

24 ‘‘(D) HABITUAL ABODE.—An individual is 

25 described in this subparagraph if— 


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1 ‘‘(i) such individual— 

2 ‘‘(I) does not have a permanent 

3 home available to such individual in 

4 either Taiwan or the United States, or 

5 ‘‘(II) has a permanent home 

6 available to such individual in both 

7 Taiwan and the United States but 

8 such individual’s center of vital inter9 ests under subparagraph (C)(ii) can10 not be determined, and 

11 ‘‘(ii) such individual has a habitual 

12 abode in Taiwan and not the United 

13 States. 

14 ‘‘(E) UNITED STATES TAX TREATMENT OF

15 QUALIFIED RESIDENT OF TAIWAN.—Notwith16 standing section 7701, an individual who is 

17 treated as a qualified resident of Taiwan by 

18 reason of this paragraph for all or any portion 

19 of a taxable year shall not be treated as a resi20 dent of the United States for purposes of com21 puting such individual’s United States income 

22 tax liability for such taxable year or portion 

23 thereof. 

24 ‘‘(4) RULES OF SPECIAL APPLICATION.— 


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1 ‘‘(A) DIVIDENDS.—For purposes of apply2 ing this section to any dividend, paragraph 

3 (2)(D) shall be applied without regard to clause 

4 (ii) thereof. 

5 ‘‘(B) ITEMS OF INCOME EMANATING FROM

6 AN ACTIVE TRADE OR BUSINESS IN TAIWAN.— 

7 For purposes of this section— 

8 ‘‘(i) IN GENERAL.—Notwithstanding 

9 the preceding paragraphs of this sub10 section, if an entity taxed as a corporation 

11 in Taiwan is not a qualified resident of 

12 Taiwan but meets the requirements of sub13 paragraphs (A) and (B) of paragraph (1), 

14 any qualified item of income such entity 

15 derived from the United States shall be 

16 treated as income of a qualified resident of 

17 Taiwan. 

18 ‘‘(ii) QUALIFIED ITEMS OF INCOME.— 

19 ‘‘(I) IN GENERAL.—The term 

20 ‘qualified item of income’ means any 

21 item of income which emanates from, 

22 or is incidental to, the conduct of an 

23 active trade or business in Taiwan 

24 (other than operating as a holding 

25 company, providing overall supervision 


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1 or administration of a group of com2 panies, providing group financing, or 

3 making or managing investments (un4 less such making or managing invest5 ments is carried on by a bank, insur6 ance company, or registered securities 

7 dealer in the ordinary course of its 

8 business as such)). 

9 ‘‘(II) SUBSTANTIAL ACTIVITY RE10 QUIREMENT.—An item of income 

11 which is derived from a trade or busi12 ness conducted in the United States 

13 or from a connected person shall be a 

14 qualified item of income only if the 

15 trade or business activity conducted in 

16 Taiwan to which the item is related is 

17 substantial in relation to the same or 

18 a complementary trade or business ac19 tivity carried on in the United States. 

20 For purposes of applying this sub21 clause, activities conducted by persons 

22 that are connected to the entity de23 scribed in clause (i) shall be deemed 

24 to be conducted by such entity. 


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1 ‘‘(iii) EXCEPTION.—This subpara2 graph shall not apply to any item of in3 come derived by an entity if at least 50 

4 percent (by vote or value) of such entity is 

5 owned (directly or indirectly) or controlled 

6 by residents of a foreign country of con7 cern. 

8 ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.— 

9 For purposes of this section— 

10 ‘‘(1) UNITED STATES PERMANENT ESTABLISH11 MENT.— 

12 ‘‘(A) IN GENERAL.—The term ‘United 

13 States permanent establishment’ means, with 

14 respect to a qualified resident of Taiwan, a per15 manent establishment of such resident which is 

16 within the United States. 

17 ‘‘(B) SPECIAL RULE.—The determination 

18 of whether there is a permanent establishment 

19 of a qualified resident of Taiwan within the 

20 United States shall be made without regard to 

21 whether an entity which is taxed as a corpora22 tion in Taiwan and which is a qualified resident 

23 of Taiwan controls or is controlled by— 

24 ‘‘(i) a domestic corporation, or 


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1 ‘‘(ii) any other person that carries on 

2 business in the United States (whether 

3 through a permanent establishment or oth4 erwise). 

5 ‘‘(2) PERMANENT ESTABLISHMENT.— 

6 ‘‘(A) IN GENERAL.—The term ‘permanent 

7 establishment’ means a fixed place of business 

8 through which a trade or business is wholly or 

9 partly carried on. Such term shall include— 

10 ‘‘(i) a place of management, 

11 ‘‘(ii) a branch, 

12 ‘‘(iii) an office, 

13 ‘‘(iv) a factory, 

14 ‘‘(v) a workshop, and 

15 ‘‘(vi) a mine, an oil or gas well, a 

16 quarry, or any other place of extraction of 

17 natural resources. 

18 ‘‘(B) SPECIAL RULES FOR CERTAIN TEM19 PORARY PROJECTS.— 

20 ‘‘(i) IN GENERAL.—A building site or 

21 construction or installation project, or an 

22 installation or drilling rig or ship used for 

23 the exploration or exploitation of the sea 

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1 ment only if it lasts, or the activities of the 

2 rig or ship lasts, for more than 12 months. 

3 ‘‘(ii) DETERMINATION OF 12-MONTH

4 PERIOD.—For purposes of clause (i), the 

5 period over which a building site or con6 struction or installation project of a person 

7 lasts shall include any period of more than 

8 30 days during which such person does not 

9 carry on activities at such building site or 

10 construction or installation project but 

11 connected activities are carried on at such 

12 building site or construction or installation 

13 project by one or more connected persons. 

14 ‘‘(C) HABITUAL EXERCISE OF CONTRACT

15 AUTHORITY TREATED AS PERMANENT ESTAB16 LISHMENT.—Notwithstanding subparagraphs 

17 (A) and (B), where a person (other than an 

18 agent of an independent status to whom sub19 paragraph (D)(ii) applies) is acting on behalf of 

20 a trade or business of a qualified resident of 

21 Taiwan and has and habitually exercises an au22 thority to conclude contracts that are binding 

23 on the trade or business, that trade or business 

24 shall be deemed to have a permanent establish25 ment in the country in which such authority is 


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1 exercised in respect of any activities that the 

2 person undertakes for the trade or business, un3 less the activities of such person are limited to 

4 those described in subparagraph (D)(i) that, if 

5 exercised through a fixed place of business, 

6 would not make this fixed place of business a 

7 permanent establishment under the provisions 

8 of that subparagraph. 

9 ‘‘(D) EXCLUSIONS.— 

10 ‘‘(i) IN GENERAL.—Notwithstanding 

11 subparagraphs (A) and (B), the term ‘per12 manent establishment’ shall not include— 

13 ‘‘(I) the use of facilities solely for 

14 the purpose of storage, display, or de15 livery of goods or merchandise belong16 ing to the trade or business, 

17 ‘‘(II) the maintenance of a stock 

18 of goods or merchandise belonging to 

19 the trade or business solely for the 

20 purpose of storage, display, or deliv21 ery, 

22 ‘‘(III) the maintenance of a stock 

23 of goods or merchandise belonging to 

24 the trade or business solely for the 


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1 purpose of processing by another 

2 trade or business, 

3 ‘‘(IV) the maintenance of a fixed 

4 place of business solely for the pur5 pose of purchasing goods or merchan6 dise, or of collecting information, for 

7 the trade or business, 

8 ‘‘(V) the maintenance of a fixed 

9 place of business solely for the pur10 pose of carrying on, for the trade or 

11 business, any other activity of a pre12 paratory or auxiliary character, or 

13 ‘‘(VI) the maintenance of a fixed 

14 place of business solely for any com15 bination of the activities mentioned in 

16 subclauses (I) through (V), provided 

17 that the overall activity of the fixed 

18 place of business resulting from this 

19 combination is of a preparatory or 

20 auxiliary character. 

21 ‘‘(ii) BROKERS AND OTHER INDE22 PENDENT AGENTS.—A trade or business 

23 shall not be considered to have a perma24 nent establishment in a country merely be25 cause it carries on business in such counVerDate Sep 11 2014 00:23 Jan 17, 2025 Jkt 059200 PO 00000 Frm 00025 Fmt 6652 Sfmt 6201 E:\BILLS\H33.RFS H33

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1 try through a broker, general commission 

2 agent, or any other agent of an inde3 pendent status, provided that such persons 

4 are acting in the ordinary course of their 

5 business as independent agents. 

6 ‘‘(3) TESTED GROUP.—The term ‘tested group’ 

7 includes, with respect to any entity taxed as a cor8 poration in Taiwan, such entity and any other entity 

9 taxed as a corporation in Taiwan that— 

10 ‘‘(A) participates as a member with such 

11 entity in a tax consolidation, fiscal unity, or 

12 similar regime that requires members of the 

13 group to share profits or losses, or 

14 ‘‘(B) shares losses with such entity pursu15 ant to a group relief or other loss sharing re16 gime. 

17 ‘‘(4) CONNECTED PERSON.—Two persons shall 

18 be ‘connected persons’ if one owns, directly or indi19 rectly, at least 50 percent of the interests in the 

20 other (or, in the case of a corporation, at least 50 

21 percent of the aggregate vote and value of the cor22 poration’s shares) or another person owns, directly 

23 or indirectly, at least 50 percent of the interests (or, 

24 in the case of a corporation, at least 50 percent of 

25 the aggregate vote and value of the corporation’s 


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1 shares) in each person. In any case, a person shall 

2 be connected to another if, based on all the relevant 

3 facts and circumstances, one has control of the other 

4 or both are under the control of the same person or 

5 persons. 

6 ‘‘(5) FOREIGN COUNTRY OF CONCERN.—The 

7 term ‘foreign country of concern’ has the meaning 

8 given such term under paragraph (7) of section 

9 9901 of the William M. (Mac) Thornberry National 

10 Defense Authorization Act for Fiscal Year 2021 (15 

11 U.S.C. 4651(7)), as added by section 103(a)(4) of 

12 the CHIPS Act of 2022). 

13 ‘‘(6) PARTNERSHIPS; BENEFICIARIES OF ES14 TATES AND TRUSTS.—For purposes of this section— 

15 ‘‘(A) a qualified resident of Taiwan which 

16 is a partner of a partnership which carries on 

17 a trade or business within the United States 

18 through a United States permanent establish19 ment shall be treated as carrying on such trade 

20 or business through such permanent establish21 ment, and 

22 ‘‘(B) a qualified resident of Taiwan which 

23 is a beneficiary of an estate or trust which car24 ries on a trade or business within the United 

25 States through a United States permanent esVerDate Sep 11 2014 00:23 Jan 17, 2025 Jkt 059200 PO 00000 Frm 00027 Fmt 6652 Sfmt 6201 E:\BILLS\H33.RFS H33

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1 tablishment shall be treated as carrying on such 

2 trade or business through such permanent es3 tablishment. 

4 ‘‘(7) DENIAL OF BENEFITS FOR CERTAIN PAY5 MENTS THROUGH HYBRID ENTITIES.—For purposes 

6 of this section, rules similar to the rules of section 

7 894(c) shall apply. 

8 ‘‘(e) APPLICATION.— 

9 ‘‘(1) IN GENERAL.—This section shall not apply 

10 to any period unless the Secretary has determined 

11 that Taiwan has provided benefits to United States 

12 persons for such period that are reciprocal to the 

13 benefits provided to qualified residents of Taiwan 

14 under this section. 

15 ‘‘(2) PROVISION OF RECIPROCITY.—The Presi16 dent or his designee is authorized to exchange let17 ters, enter into an agreement, or take other nec18 essary and appropriate steps relative to Taiwan for 

19 the reciprocal provision of the benefits described in 

20 this section. 

21 ‘‘(f) REGULATIONS OR OTHER GUIDANCE.— 

22 ‘‘(1) IN GENERAL.—The Secretary shall issue 

23 such regulations or other guidance as may be nec24 essary or appropriate to carry out the provisions of 


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1 this section, including such regulations or guidance 

2 for— 

3 ‘‘(A) determining— 

4 ‘‘(i) what constitutes a United States 

5 permanent establishment of a qualified 

6 resident of Taiwan, and 

7 ‘‘(ii) income that is effectively con8 nected with such a permanent establish9 ment, 

10 ‘‘(B) preventing the abuse of the provisions 

11 of this section by persons who are not (or who 

12 should not be treated as) qualified residents of 

13 Taiwan, 

14 ‘‘(C) requirements for record keeping and 

15 reporting, 

16 ‘‘(D) rules to assist withholding agents or 

17 employers in determining whether a foreign per18 son is a qualified resident of Taiwan for pur19 poses of determining whether withholding or re20 porting is required for a payment (and, if with21 holding is required, whether it should be applied 

22 at a reduced rate), 

23 ‘‘(E) the application of subsection 

24 (a)(1)(D)(i) to stock held by predecessor own25 ers, 


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1 ‘‘(F) determining what amounts are to be 

2 treated as qualified wages for purposes of sub3 section (a)(2), 

4 ‘‘(G) determining the amounts to which 

5 subsection (a)(3) applies, 

6 ‘‘(H) defining established securities market 

7 for purposes of subsection (c), 

8 ‘‘(I) the application of the rules of sub9 section (c)(4)(B), 

10 ‘‘(J) the application of subsection (d)(6) 

11 and section 1446, 

12 ‘‘(K) determining ownership interests held 

13 by residents of a foreign country of concern, 

14 and 

15 ‘‘(L) determining the starting and ending 

16 dates for periods with respect to the application 

17 of this section under subsection (e), which may 

18 be separate dates for taxes withheld at the 

19 source and other taxes. 

20 ‘‘(2) REGULATIONS TO BE CONSISTENT WITH

21 MODEL TREATY.—Any regulations or other guidance 

22 issued under this section shall, to the extent prac23 tical, be consistent with the provisions of the United 

24 States model income tax convention dated February 

25 7, 2016.’’. 


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1 (b) CONFORMING AMENDMENT TO WITHHOLDING

2 TAX.—Subchapter A of chapter 3 of the Internal Revenue 

3 Code of 1986 is amended by adding at the end the fol4 lowing new section: 

5 ‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 

6 TAIWAN. 

7 ‘‘For reduced rates of withholding for certain resi8 dents of Taiwan, see section 894A.’’. 

9 (c) CLERICAL AMENDMENTS.— 

10 (1) The table of sections for subpart D of part 

11 II of subchapter N of chapter 1 of the Internal Rev12 enue Code of 1986 is amended by inserting after the 

13 item relating to section 894 the following new item: 

‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’. 

14 (2) The table of sections for subchapter A of 

15 chapter 3 of such Code is amended by adding at the 

16 end the following new item: 

‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’. 

17 TITLE II—UNITED STATES-TAI18 WAN TAX AGREEMENT AU19 THORIZATION ACT 

20 SEC. 201. SHORT TITLE. 

21 This title may be cited as the ‘‘United States-Taiwan 

22 Tax Agreement Authorization Act’’. 

23 SEC. 202. DEFINITIONS. 

24 In this title: 


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1 (1) AGREEMENT.—The term ‘‘Agreement’’ 

2 means the tax agreement authorized by section 

3 203(a). 

4 (2) APPROPRIATE CONGRESSIONAL COMMIT5 TEES.—The term ‘‘appropriate congressional com6 mittees’’ means— 

7 (A) the Committee on Foreign Relations 

8 and the Committee on Finance of the Senate; 

9 and 

10 (B) the Committee on Ways and Means of 

11 the House of Representatives. 

12 (3) APPROVAL LEGISLATION.—The term ‘‘ap13 proval legislation’’ means legislation that approves 

14 the Agreement. 

15 (4) IMPLEMENTING LEGISLATION.—The term 

16 ‘‘implementing legislation’’ means legislation that 

17 makes any changes to the Internal Revenue Code of 

18 1986 necessary to implement the Agreement. 

19 SEC. 203. AUTHORIZATION TO NEGOTIATE AND ENTER 

20 INTO AGREEMENT. 

21 (a) IN GENERAL.—Subsequent to a determination 

22 under section 894A(e)(1) of the Internal Revenue Code 

23 of 1986 (as added by the United States-Taiwan Expedited 

24 Double-Tax Relief Act), the President is authorized to ne25 gotiate and enter into a tax agreement relative to Taiwan. 


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1 (b) ELEMENTS OF AGREEMENT.— 

2 (1) CONFORMITY WITH BILATERAL INCOME TAX

3 CONVENTIONS.—The President shall ensure that— 

4 (A) any provisions included in the Agree5 ment conform with provisions customarily con6 tained in United States bilateral income tax 

7 conventions, as exemplified by the 2016 United 

8 States Model Income Tax Convention; and 

9 (B) the Agreement does not include ele10 ments outside the scope of the 2016 United 

11 States Model Income Tax Convention. 

12 (2) INCORPORATION OF TAX AGREEMENTS AND

13 LAWS.—Notwithstanding paragraph (1), the Agree14 ment may incorporate and restate provisions of any 

15 agreement, or existing United States law, addressing 

16 double taxation for residents of the United States 

17 and Taiwan. 

18 (3) AUTHORITY.—The Agreement shall include 

19 the following statement: ‘‘The Agreement is entered 

20 into pursuant to the United States-Taiwan Tax 

21 Agreement Authorization Act.’’ 

22 (4) ENTRY INTO FORCE.—The Agreement shall 

23 include a provision conditioning entry into force 

24 upon— 


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1 (A) enactment of approval legislation and 

2 implementing legislation pursuant to section 

3 207; and 

4 (B) confirmation by the Secretary of the 

5 Treasury that the relevant authority in Taiwan 

6 has approved and taken appropriate steps re7 quired to implement the Agreement. 

8 SEC. 204. CONSULTATIONS WITH CONGRESS. 

9 (a) NOTIFICATION UPON COMMENCEMENT OF NEGO10 TIATIONS.—The President shall provide written notifica11 tion to the appropriate congressional committees of the 

12 commencement of negotiations between the United States 

13 and Taiwan on the Agreement at least 15 calendar days 

14 before commencing such negotiations. 

15 (b) CONSULTATIONS DURING NEGOTIATIONS.— 

16 (1) BRIEFINGS.—Not later than 90 days after 

17 commencement of negotiations with respect to the 

18 Agreement, and every 180 days thereafter until the 

19 President enters into the Agreement, the President 

20 shall provide a briefing to the appropriate congres21 sional committees on the status of the negotiations, 

22 including a description of elements under negotia23 tion. 

24 (2) MEETINGS AND OTHER CONSULTATIONS.— 


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1 (A) IN GENERAL.—In the course of nego2 tiations with respect to the Agreement, the Sec3 retary of the Treasury, in coordination with the 

4 Secretary of State, shall— 

5 (i) meet, upon request, with the chair6 man or ranking member of any of the ap7 propriate congressional committees regard8 ing negotiating objectives and the status of 

9 negotiations in progress; and 

10 (ii) consult closely and on a timely 

11 basis with, and keep fully apprised of the 

12 negotiations, the appropriate congressional 

13 committees. 

14 (B) ELEMENTS OF CONSULTATIONS.—The 

15 consultations described in subparagraph (A) 

16 shall include consultations with respect to— 

17 (i) the nature of the contemplated 

18 Agreement; 

19 (ii) how and to what extent the con20 templated Agreement is consistent with the 

21 elements set forth in section 203(b); and 

22 (iii) the implementation of the con23 templated Agreement, including— 

24 (I) the general effect of the con25 templated Agreement on existing laws; 


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1 (II) proposed changes to any ex2 isting laws to implement the con3 templated Agreement; and 

4 (III) proposed administrative ac5 tions to implement the contemplated 

6 Agreement. 

7 SEC. 205. APPROVAL AND IMPLEMENTATION OF AGREE8 MENT. 

9 (a) IN GENERAL.—The Agreement may not enter 

10 into force unless— 

11 (1) the President, at least 60 days before the 

12 day on which the President enters into the Agree13 ment, publishes the text of the contemplated Agree14 ment on a publicly available website of the Depart15 ment of the Treasury; and 

16 (2) there is enacted into law, with respect to 

17 the Agreement, approval legislation and imple18 menting legislation pursuant to section 207. 

19 (b) ENTRY INTO FORCE.—The President may pro20 vide for the Agreement to enter into force upon— 

21 (1) enactment of approval legislation and imple22 menting legislation pursuant to section 207; and 

23 (2) confirmation by the Secretary of the Treas24 ury that the relevant authority in Taiwan has apVerDate Sep 11 2014 00:23 Jan 17, 2025 Jkt 059200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\H33.RFS H33

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1 proved and taken appropriate steps required to im2 plement the Agreement. 

3 SEC. 206. SUBMISSION TO CONGRESS OF AGREEMENT AND 

4 IMPLEMENTATION POLICY. 

5 (a) SUBMISSION OF AGREEMENT.—Not later than 

6 270 days after the President enters into the Agreement, 

7 the President or the President’s designee shall submit to 

8 Congress— 

9 (1) the final text of the Agreement; and 

10 (2) a technical explanation of the Agreement. 

11 (b) SUBMISSION OF IMPLEMENTATION POLICY.—Not 

12 later than 270 days after the President enters into the 

13 Agreement, the Secretary of the Treasury shall submit to 

14 Congress— 

15 (1) a description of those changes to existing 

16 laws that the President considers would be required 

17 in order to ensure that the United States acts in a 

18 manner consistent with the Agreement; and 

19 (2) a statement of anticipated administrative 

20 action proposed to implement the Agreement. 

21 SEC. 207. CONSIDERATION OF APPROVAL LEGISLATION 

22 AND IMPLEMENTING LEGISLATION. 

23 (a) IN GENERAL.—The approval legislation with re24 spect to the Agreement shall include the following: ‘‘Con25 gress approves the Agreement submitted to Congress purVerDate Sep 11 2014 00:23 Jan 17, 2025 Jkt 059200 PO 00000 Frm 00037 Fmt 6652 Sfmt 6201 E:\BILLS\H33.RFS H33

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1 suant to section 206 of the United States-Taiwan Tax 

2 Agreement Authorization Act on llll.’’, with the 

3 blank space being filled with the appropriate date. 

4 (b) APPROVAL LEGISLATION COMMITTEE REFER5 RAL.—The approval legislation shall— 

6 (1) in the Senate, be referred to the Committee 

7 on Foreign Relations; and 

8 (2) in the House of Representatives, be referred 

9 to the Committee on Ways and Means. 

10 (c) IMPLEMENTING LEGISLATION COMMITTEE RE11 FERRAL.—The implementing legislation shall— 

12 (1) in the Senate, be referred to the Committee 

13 on Finance; and 

14 (2) in the House of Representatives, be referred 

15 to the Committee on Ways and Means. 

16 SEC. 208. RELATIONSHIP OF AGREEMENT TO INTERNAL 

17 REVENUE CODE OF 1986. 

18 (a) INTERNAL REVENUE CODE OF 1986 TO CON19 TROL.—No provision of the Agreement or approval legisla20 tion, nor the application of any such provision to any per21 son or circumstance, which is inconsistent with any provi22 sion of the Internal Revenue Code of 1986, shall have ef23 fect. 

24 (b) CONSTRUCTION.—Nothing in this title shall be 

25 construed— 


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1 (1) to amend or modify any law of the United 

2 States; or 

3 (2) to limit any authority conferred under any 

4 law of the United States, 

5 unless specifically provided for in this title. 

6 SEC. 209. AUTHORIZATION OF SUBSEQUENT TAX AGREE7 MENTS RELATIVE TO TAIWAN. 

8 (a) IN GENERAL.—Subsequent to the enactment of 

9 approval legislation and implementing legislation pursuant 

10 to section 207— 

11 (1) the term ‘‘tax agreement’’ in section 203(a) 

12 shall be treated as including any tax agreement rel13 ative to Taiwan which supplements or supersedes 

14 the Agreement to which such approval legislation 

15 and implementing legislation relates, and 

16 (2) the term ‘‘Agreement’’ shall be treated as 

17 including such tax agreement. 

18 (b) REQUIREMENTS, ETC., TO APPLY SEPA19 RATELY.—The provisions of this title (including section 

20 204) shall be applied separately with respect to each tax 

21 agreement referred to in subsection (a). 

22 SEC. 210. UNITED STATES TREATMENT OF DOUBLE TAX23 ATION MATTERS WITH RESPECT TO TAIWAN. 

24 (a) FINDINGS.—Congress makes the following find25 ings: 


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1 (1) The United States addresses issues with re2 spect to double taxation with foreign countries by 

3 entering into bilateral income tax conventions 

4 (known as tax treaties) with such countries, subject 

5 to the advice and consent of the Senate to ratifica6 tion pursuant to article II of the Constitution. 

7 (2) The United States has entered into more 

8 than sixty such tax treaties, which facilitate eco9 nomic activity, strengthen bilateral cooperation, and 

10 benefit United States workers, businesses, and other 

11 United States taxpayers. 

12 (3) Due to Taiwan’s unique status, the United 

13 States is unable to enter into an article II tax treaty 

14 with Taiwan, necessitating an agreement to address 

15 issues with respect to double taxation. 

16 (b) STATEMENT OF POLICY.—It is the policy of the 

17 United States to— 

18 (1) provide for additional bilateral tax relief 

19 with respect to Taiwan, beyond that provided for in 

20 section 894A of the Internal Revenue Code of 1986 

21 (as added by the United States-Taiwan Expedited 

22 Double-Tax Relief Act), only after entry into force 

23 of an Agreement, as provided for in section 205, and 

24 only in a manner consistent with such Agreement; 

25 and 


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1 (2) continue to provide for bilateral tax relief 

2 with sovereign states to address double taxation and 

3 other related matters through entering into bilateral 

4 income tax conventions, subject to the Senate’s ad5 vice and consent to ratification pursuant to article II 

6 of the Constitution. 

Passed the House of Representatives January 15, 

2025. 

Attest: KEVIN F. MCCUMBER, 

Clerk. 


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