IB 
Union Calendar No. 288 
118TH CONGRESS 
2D SESSION 
H. R. 7024 
[Report No. 118–353, Part I] 
To make improvements to the child tax credit, to provide tax incentives 
to promote economic growth, to provide special rules for the taxation 
of certain residents of Taiwan with income from sources within the 
United States, to provide tax relief with respect to certain Federal 
disasters, to make improvements to the low-income housing tax credit, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 17, 2024 
Mr. SMITH of Missouri introduced the following bill; which was referred to the 
Committee on Ways and Means, and in addition to the Committee on 
Rules, for a period to be subsequently determined by the Speaker, in each 
case for consideration of such provisions as fall within the jurisdiction of 
the committee concerned 
JANUARY 23, 2024 
Reported from the Committee on Ways and Means with an amendment 
[Strike out all after the enacting clause and insert the part printed in italic] 
JANUARY 23, 2024 
Committee on Rules discharged; committed to the Committee of the Whole 
House on the State of the Union and ordered to be printed 
[For text of introduced bill, see copy of bill as introduced on January 17, 2024] 
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A BILL 
To make improvements to the child tax credit, to provide 
tax incentives to promote economic growth, to provide 
special rules for the taxation of certain residents of Tai-
wan with income from sources within the United States, 
to provide tax relief with respect to certain Federal disas-
ters, to make improvements to the low-income housing 
tax credit, and for other purposes. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS; ETC. 
(a) SHORT TITLE.—This Act may be cited as the ‘‘Tax 
Relief for American Families and Workers Act of 2024’’. 
(b) AMENDMENT OF 1986 CODE.—Except as otherwise 
expressly provided, whenever in this Act an amendment or 
repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be consid-
ered to be made to a section or other provision of the Inter-
nal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of this 
Act is as follows: 
Sec. 1. Short title; table of contents; etc. 
TITLE I—TAX RELIEF FOR WORKING FAMILIES 
Sec. 101. Per-child calculation of refundable portion of child tax credit. 
Sec. 102. Increase in refundable portion. 
Sec. 103. Inflation of credit amount. 
Sec. 104. Rule for determination of earned income. 
Sec. 105. Special rule for certain early-filed 2023 returns. 
TITLE II—AMERICAN INNOVATION AND GROWTH 
Sec. 201. Deduction for domestic research and experimental expenditures. 
Sec. 202. Extension of allowance for depreciation, amortization, or depletion in 
determining the limitation on business interest. 
Sec. 203. Extension of 100 percent bonus depreciation. 
Sec. 204. Increase in limitations on expensing of depreciable business assets. 
TITLE III—INCREASING GLOBAL COMPETITIVENESS 
Subtitle A—United States-Taiwan Expedited Double-Tax Relief Act 
Sec. 301. Short title. 
Sec. 302. Special rules for taxation of certain residents of Taiwan. 
Subtitle B—United States-Taiwan Tax Agreement Authorization Act 
Sec. 311. Short title. 
Sec. 312. Definitions. 
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Sec. 313. Authorization to negotiate and enter into agreement. 
Sec. 314. Consultations with Congress. 
Sec. 315. Approval and implementation of agreement. 
Sec. 316. Submission to Congress of agreement and implementation policy. 
Sec. 317. Consideration of approval legislation and implementing legislation. 
Sec. 318. Relationship of agreement to Internal Revenue Code of 1986. 
Sec. 319. Authorization of subsequent tax agreements relative to Taiwan. 
Sec. 320. United States treatment of double taxation matters with respect to Tai-
wan. 
TITLE IV—ASSISTANCE FOR DISASTER-IMPACTED COMMUNITIES 
Sec. 401. Short title. 
Sec. 402. Extension of rules for treatment of certain disaster-related personal cas-
ualty losses. 
Sec. 403. Exclusion from gross income for compensation for losses or damages re-
sulting from certain wildfires. 
Sec. 404. East Palestine disaster relief payments. 
TITLE V—MORE AFFORDABLE HOUSING 
Sec. 501. State housing credit ceiling increase for low-income housing credit. 
Sec. 502. Tax-exempt bond financing requirement. 
TITLE VI—TAX ADMINISTRATION AND ELIMINATING FRAUD 
Sec. 601. Increase in threshold for requiring information reporting with respect 
to certain payees. 
Sec. 602. Enforcement provisions with respect to COVID-related employee reten-
tion credits. 
TITLE I—TAX RELIEF FOR 
WORKING FAMILIES 
SEC. 101. PER-CHILD CALCULATION OF REFUNDABLE POR-
TION OF CHILD TAX CREDIT. 
(a) IN
GENERAL.—Subparagraph (A) of section 
24(h)(5) is amended to read as follows: 
‘‘(A) IN GENERAL.—In applying subsection 
(d)— 
‘‘(i) the amount determined under 
paragraph (1)(A) of such subsection with 
respect to any qualifying child shall not ex-
ceed $1,400, and such paragraph shall be 
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applied without regard to paragraph (4) of 
this subsection, and 
‘‘(ii) paragraph (1)(B) of such sub-
section shall be applied by multiplying each 
of— 
‘‘(I) the amount determined under 
clause (i) thereof, and 
‘‘(II) the excess determined under 
clause (ii) thereof, 
by the number of qualifying children of the 
taxpayer.’’. 
(b) CONFORMING AMENDMENT.—The heading of para-
graph (5) of section 24(h) is amended by striking ‘‘MAX-
IMUM AMOUNT OF’’ and inserting ‘‘SPECIAL RULES FOR’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2022. 
SEC. 102. INCREASE IN REFUNDABLE PORTION. 
(a) IN GENERAL.—Paragraph (5) of section 24(h) is 
amended by redesignating subparagraph (B) as subpara-
graph (C) and by inserting after subparagraph (A) the fol-
lowing new subparagraph: 
‘‘(B) AMOUNTS FOR 2023, 2024, AND 2025.— 
In the case of a taxable year beginning after 
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2022, subparagraph (A) shall be applied by sub-
stituting for ‘$1,400’— 
‘‘(i) in the case of taxable year 2023, 
‘$1,800’, 
‘‘(ii) in the case of taxable year 2024, 
‘$1,900’, and 
‘‘(iii) in the case of taxable year 2025, 
‘$2,000’.’’. 
(b) CONFORMING AMENDMENT.—Subparagraph (C) of 
section 24(h)(5), as redesignated by subsection (a), is 
amended by inserting ‘‘and before 2023’’ after ‘‘2018’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2022. 
SEC. 103. INFLATION OF CREDIT AMOUNT. 
(a) IN GENERAL.—Paragraph (2) of section 24(h) is 
amended— 
(1) by striking ‘‘AMOUNT.—Subsection’’ and in-
serting ‘‘AMOUNT.— 
‘‘(A) IN GENERAL.—Subsection’’, and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) ADJUSTMENT FOR INFLATION.—In the 
case of a taxable year beginning after 2023, the 
$2,000 amounts in subparagraph (A) and para-
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graph (5)(B)(iii) shall each be increased by an 
amount equal to— 
‘‘(i) such dollar amount, multiplied by 
‘‘(ii) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the taxable year be-
gins, determined by substituting ‘2022’ for 
‘2016’ in subparagraph (A)(ii) thereof. 
If any increase under this clause is not a mul-
tiple of $100, such increase shall be rounded to 
the next lowest multiple of $100.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2023. 
SEC. 104. RULE FOR DETERMINATION OF EARNED INCOME. 
(a) IN GENERAL.—Paragraph (6) of section 24(h) of 
the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘CREDIT.—Subsection’’ and in-
serting ‘‘CREDIT.— 
‘‘(A) IN GENERAL.—Subsection’’, and 
(2) by adding at the end the following new sub-
paragraphs 
‘‘(B) 
RULE
FOR
DETERMINATION
OF 
EARNED INCOME.— 
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‘‘(i) IN GENERAL.—In the case of a 
taxable year beginning after 2023, if the 
earned income of the taxpayer for such tax-
able year is less than the earned income of 
the taxpayer for the preceding taxable year, 
subsection (d)(1)(B)(i) may, at the election 
of the taxpayer, be applied by sub-
stituting— 
‘‘(I) the earned income for such 
preceding taxable year, for 
‘‘(II) the earned income for the 
current taxable year. 
‘‘(ii) APPLICATION
TO
JOINT
RE-
TURNS.—For purposes of clause (i), in the 
case of a joint return, the earned income of 
the taxpayer for the preceding taxable year 
shall be the sum of the earned income of 
each spouse for such preceding taxable 
year.’’. 
(b) ERRORS TREATED AS MATHEMATICAL ERRORS.— 
Paragraph (2) of section 6213(g) of the Internal Revenue 
Code of 1986 is amended by striking ‘‘and’’ at the end of 
subparagraph (U), by striking the period at the end of sub-
paragraph (V) and inserting ‘‘, and’’, and by inserting after 
subparagraph (V) the following new subparagraph: 
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‘‘(W) in the case of a taxpayer electing the 
application of section 24(h)(6)(B) for any tax-
able year, an entry on a return of earned income 
pursuant to such section which is inconsistent 
with the amount of such earned income deter-
mined by the Secretary for the preceding taxable 
year.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2023. 
SEC. 105. SPECIAL RULE FOR CERTAIN EARLY-FILED 2023 
RETURNS. 
In the case of an individual who claims, on the tax-
payer’s return of tax for the first taxable year beginning 
after December 31, 2022, a credit under section 24 of the 
Internal Revenue Code of 1986 which is determined without 
regard to the amendments made by sections 101 and 102 
of this Act, the Secretary of the Treasury (or the Secretary’s 
delegate) shall, to the maximum extent practicable— 
(1) redetermine the amount of such credit (after 
taking into account such amendments) on the basis of 
the information provided by the taxpayer on such re-
turn, and 
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(2) to the extent that such redetermination re-
sults in an overpayment of tax, credit or refund such 
overpayment as expeditiously as possible. 
TITLE II—AMERICAN 
INNOVATION AND GROWTH 
SEC. 201. DEDUCTION FOR DOMESTIC RESEARCH AND EX-
PERIMENTAL EXPENDITURES. 
(a) DELAY
OF AMORTIZATION
OF DOMESTIC RE-
SEARCH
AND
EXPERIMENTAL
EXPENDITURES.—Section 
174 is amended by adding at the end the following new 
subsection: 
‘‘(e) SUSPENSION OF APPLICATION OF SECTION TO DO-
MESTIC RESEARCH AND EXPERIMENTAL EXPENDITURES.— 
In the case of any domestic research or experimental ex-
penditures (as defined in section 174A(b)), this section— 
‘‘(1) shall apply to such expenditures paid or in-
curred in taxable years beginning after December 31, 
2025, and 
‘‘(2) shall not apply to such expenditures paid or 
incurred in taxable years beginning on or before such 
date.’’. 
(b) REINSTATEMENT OF EXPENSING FOR DOMESTIC 
RESEARCH AND EXPERIMENTAL EXPENDITURES.—Part VI 
of subchapter B of chapter 1 is amended by inserting after 
section 174 the following new section: 
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‘‘SEC. 174A. TEMPORARY RULES FOR DOMESTIC RESEARCH 
AND EXPERIMENTAL EXPENDITURES. 
‘‘(a) TREATMENT
AS EXPENSES.—Notwithstanding 
section 263, there shall be allowed as a deduction any do-
mestic research or experimental expenditures which are 
paid or incurred by the taxpayer during the taxable year. 
‘‘(b) DOMESTIC RESEARCH OR EXPERIMENTAL EX-
PENDITURES.—For purposes of this section, the term ‘do-
mestic research or experimental expenditures’ means re-
search or experimental expenditures paid or incurred by the 
taxpayer in connection with the taxpayer’s trade or busi-
ness other than such expenditures which are attributable to 
foreign 
research 
(within 
the 
meaning 
of 
section 
41(d)(4)(F)). 
‘‘(c) AMORTIZATION
OF
CERTAIN
DOMESTIC
RE-
SEARCH AND EXPERIMENTAL EXPENDITURES.— 
‘‘(1) IN GENERAL.—At the election of the tax-
payer, made in accordance with regulations or other 
guidance provided by the Secretary, in the case of do-
mestic research or experimental expenditures which 
would (but for subsection (a)) be chargeable to capital 
account but not chargeable to property of a character 
which is subject to the allowance under section 167 
(relating to allowance for depreciation, etc.) or section 
611 (relating to allowance for depletion), subsection 
(a) shall not apply and the taxpayer shall— 
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‘‘(A) charge such expenditures to capital ac-
count, and 
‘‘(B) be allowed an amortization deduction 
of such expenditures ratably over such period of 
not less than 60 months as may be selected by 
the taxpayer (beginning with the month in 
which the taxpayer first realizes benefits from 
such expenditures). 
‘‘(2) TIME FOR AND SCOPE OF ELECTION.—The 
election provided by paragraph (1) may be made for 
any taxable year, but only if made not later than the 
time prescribed by law for filing the return for such 
taxable year (including extensions thereof). The meth-
od so elected, and the period selected by the taxpayer, 
shall be adhered to in computing taxable income for 
the taxable year for which the election is made and 
for all subsequent taxable years unless, with the ap-
proval of the Secretary, a change to a different meth-
od (or to a different period) is authorized with respect 
to part or all of such expenditures. The election shall 
not apply to any expenditure paid or incurred during 
any taxable year before the taxable year for which the 
taxpayer makes the election. 
‘‘(d) ELECTION TO CAPITALIZE EXPENSES.—In the 
case of a taxpayer which elects (at such time and in such 
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manner as the Secretary may provide) the application of 
this subsection, subsections (a) and (c) shall not apply and 
domestic research or experimental expenditures shall be 
chargeable to capital account. Such election shall not apply 
to any expenditure paid or incurred during any taxable 
year before the taxable year for which the taxpayer makes 
the election and may be made with respect to part of the 
expenditures paid or incurred during any taxable year only 
with the approval of the Secretary. 
‘‘(e) SPECIAL RULES.— 
‘‘(1) LAND AND OTHER PROPERTY.—This section 
shall not apply to any expenditure for the acquisition 
or improvement of land, or for the acquisition or im-
provement of property to be used in connection with 
the research or experimentation and of a character 
which is subject to the allowance under section 167 
(relating to allowance for depreciation, etc.) or section 
611 (relating to allowance for depletion); but for pur-
poses of this section allowances under section 167, 
and allowances under section 611, shall be considered 
as expenditures. 
‘‘(2) EXPLORATION
EXPENDITURES.—This sec-
tion shall not apply to any expenditure paid or in-
curred for the purpose of ascertaining the existence, 
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location, extent, or quality of any deposit of ore or 
other mineral (including oil and gas). 
‘‘(3) SOFTWARE
DEVELOPMENT.—For purposes 
of this section, any amount paid or incurred in con-
nection with the development of any software shall be 
treated as a research or experimental expenditure. 
‘‘(f) TERMINATION.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to amounts paid or incurred in taxable years begin-
ning after December 31, 2025. 
‘‘(2) CHANGE IN METHOD OF ACCOUNTING.—In 
the case of a taxpayer’s first taxable year beginning 
after December 31, 2025, paragraph (1) (and the cor-
responding application of section 174) shall be treated 
as a change in method of accounting for purposes of 
section 481 and— 
‘‘(A) such change shall be treated as initi-
ated by the taxpayer, 
‘‘(B) such change shall be treated as made 
with the consent of the Secretary, and 
‘‘(C) such change shall be applied only on 
a cut-off basis for any domestic research or ex-
perimental expenditures paid or incurred in tax-
able years beginning after December 31, 2025, 
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and no adjustment under section 481(a) shall be 
made.’’. 
(c) COORDINATION WITH CERTAIN OTHER PROVI-
SIONS.— 
(1) RESEARCH CREDIT.— 
(A) Section 41(d)(1)(A) is amended by in-
serting ‘‘or domestic research or experimental ex-
penditures under section 174A’’ after ‘‘section 
174’’. 
(B) Section 280C(c)(1) is amended to read 
as follows: 
‘‘(1) IN GENERAL.—The domestic research or ex-
perimental expenditures otherwise taken into account 
under section 174 or 174A (as the case may be) shall 
be reduced by the amount of the credit allowed under 
section 41(a).’’. 
(2) AMT ADJUSTMENT.—Section 56(b)(2) is 
amended by striking ‘‘174(a)’’ each place it appears 
and inserting ‘‘174A(a)’’. 
(3) 
OPTIONAL
10-YEAR
WRITEOFF.—Section 
59(e)(2)(B) is amended by striking ‘‘section 174(a) 
(relating to research and experimental expenditures)’’ 
and inserting ‘‘section 174A(a) (relating to temporary 
rules for domestic research and experimental expendi-
tures)’’. 
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(4) QUALIFIED
SMALL
ISSUE
BONDS.—Section 
144(a)(4)(C)(iv) is amended by striking ‘‘174(a)’’ and 
inserting ‘‘174A(a)’’. 
(5) 
START-UP
EXPENDITURES.—Section 
195(c)(1) is amended by striking ‘‘or 174’’ in the last 
sentence and inserting ‘‘174, or 174A’’. 
(6) CAPITAL EXPENDITURES.— 
(A) Section 263(a)(1)(B) is amended by in-
serting ‘‘ or 174A’’ after ‘‘174’’. 
(B) Section 263A(c)(2) is amended by in-
serting ‘‘or 174A’’ after ‘‘174’’. 
(7) ACTIVE
BUSINESS
COMPUTER
SOFTWARE 
ROYALTIES.—Section 543(d)(4)(A)(i) is amended by 
inserting ‘‘174A,’’ after ‘‘174,’’. 
(8) 
SOURCE
RULES.—Section 
864(g)(2) 
is 
amended in the last sentence— 
(A) by striking ‘‘treated as deferred expenses 
under subsection (b) of section 174’’ and insert-
ing ‘‘allowed as an amortization deduction 
under section 174(a) or section 174A(c),’’, and 
(B) by striking ‘‘such subsection’’ and in-
serting ‘‘such section (as the case may be)’’. 
(9) BASIS ADJUSTMENT.—Section 1016(a)(14) is 
amended by striking ‘‘deductions as deferred expenses 
under section 174(b)(1) (relating to research and ex-
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perimental expenditures)’’ and inserting ‘‘deductions 
under section 174 or 174A’’. 
(10) 
SMALL
BUSINESS
STOCK.—Section 
1202(e)(2)(B) is amended by striking ‘‘research and 
experimental expenditures under section 174’’ and in-
serting ‘‘specified research or experimental expendi-
tures under section 174 or domestic research or exper-
imental expenditures under section 174A’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Section 13206 of Public Law 115–97 is 
amended by striking subsection (b) (relating to 
change in method of accounting). 
(2) The table of sections for part VI of sub-
chapter B of chapter 1 is amended by inserting after 
the item relating to section 174 the following new 
item: 
‘‘Sec. 174A. Temporary rules for domestic research and experimental expendi-
tures.’’. 
(e) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2021. 
(2) COORDINATION WITH RESEARCH CREDIT.— 
The amendment made by subsection (c)(1)(B) shall 
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apply to taxable years beginning after December 31, 
2022. 
(3) REPEAL OF SUPERCEDED CHANGE IN METH-
OD OF ACCOUNTING RULES.—The amendment made 
by subsection (d)(1) shall take effect as if included in 
Public Law 115–97. 
(4) NO INFERENCE WITH RESPECT TO COORDINA-
TION WITH RESEARCH CREDIT FOR PRIOR PERIODS.— 
The amendment made by subsection (c)(1)(B) shall 
not be construed to create any inference with respect 
to the proper application of section 280C(c) of the In-
ternal Revenue Code of 1986 with respect to taxable 
years beginning before January 1, 2023. 
(f) TRANSITION RULES.— 
(1) IN GENERAL.—Except as otherwise provided 
by the Secretary, an election made under subsection 
(c) or (d) of section 174A of the Internal Revenue 
Code of 1986 (as added by this section) for the tax-
payer’s first taxable year beginning after December 
31, 2021, shall not fail to be treated as timely made 
(or as made on the return) if made during the 1-year 
period beginning on the date of the enactment of this 
Act on an amended return for the taxpayer’s first 
taxable year beginning after December 31, 2021, or in 
such other manner as the Secretary may provide. 
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(2) 
ELECTION
REGARDING
TREATMENT
AS 
CHANGE IN METHOD OF ACCOUNTING.—In the case of 
any taxpayer which (as of the date of the enactment 
of this Act) had adopted a method of accounting pro-
vided by section 174 of the Internal Revenue Code of 
1986 (as in effect prior to the amendments made by 
this section) for the taxpayer’s first taxable year be-
ginning after December 31, 2021, and elects the ap-
plication of this paragraph— 
(A) the amendments made by this section 
shall be treated as a change in method of ac-
counting for purposes of section 481 of such 
Code, 
(B) such change shall be treated as initiated 
by the taxpayer for the taxpayer’s immediately 
succeeding taxable year, 
(C) such change shall be treated as made 
with the consent of the Secretary, 
(D) such change shall be applied on a modi-
fied cut-off basis, taking into account for pur-
poses of section 481(a) of such Code only the do-
mestic research or experimental expenditures (as 
defined in section 174A(b) of such Code (as 
added by this section) and determined by apply-
ing the rules of section 174A(e) of such Code) 
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paid or incurred in the taxpayer’s first taxable 
year beginning after December 31, 2021, and not 
allowed as a deduction in such taxable year, and 
(E) in the case of a taxpayer which elects 
the application of this subparagraph, the amount 
of such change (as determined under subpara-
graph (D)) shall be taken into account ratably 
over the 2-taxable-year period beginning with the 
taxable year referred to in subparagraph (B). 
(3) ELECTION REGARDING 10-YEAR WRITEOFF.— 
(A) IN GENERAL.—Except as otherwise pro-
vided by the Secretary, an eligible taxpayer 
which files, during the 1-year period beginning 
on the date of the enactment of this Act, an 
amended income tax return for the taxable year 
described in subparagraph (B)(ii) may elect the 
application of section 59(e) of the Internal Rev-
enue Code of 1986 with respect to qualified ex-
penditures described in section 59(e)(2)(B) of 
such Code (as amended by subsection (c)(3)) 
with respect to such taxable year. Such election 
shall be filed with such amended income tax re-
turn and shall be effective only to the extent that 
such election would have been effective if filed 
with the original income tax return for such tax-
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able year (determined after taking into account 
the amendment made by subsection (c)(3)). 
(B) ELIGIBLE TAXPAYER.—For purposes of 
subparagraph (A), the term ‘‘eligible taxpayer’’ 
means any taxpayer which— 
(i) does not elect the application of 
paragraph (2), and 
(ii) filed an income tax return for such 
taxpayer’s first taxable year beginning after 
December 31, 2021, before the earlier of— 
(I) the due date for such return, 
and 
(II) the date of the enactment of 
this Act. 
(4) ELECTION REGARDING COORDINATION WITH 
RESEARCH CREDIT.—Except as otherwise provided by 
the Secretary, an eligible taxpayer (as defined in 
paragraph (3)(B) without regard to clause (i) thereof) 
which files, during the 1-year period beginning on the 
date of the enactment of this Act, an amended income 
tax return for the taxpayer’s first taxable year begin-
ning after December 31, 2021, may, notwithstanding 
subparagraph (C) of section 280C(c)(2) of the Inter-
nal Revenue Code of 1986 make, or revoke, on such 
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amended return the election under such section for 
such taxable year. 
SEC. 202. EXTENSION OF ALLOWANCE FOR DEPRECIATION, 
AMORTIZATION, OR DEPLETION IN DETER-
MINING THE LIMITATION ON BUSINESS IN-
TEREST. 
(a) IN GENERAL.—Section 163(j)(8)(A)(v) is amended 
by striking ‘‘January 1, 2022’’ and inserting ‘‘January 1, 
2026’’. 
(b) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendment made by this sec-
tion shall apply to taxable years beginning after De-
cember 31, 2023. 
(2) ELECTION
TO
APPLY
EXTENSION
RETRO-
ACTIVELY.—In the case of a taxpayer which elects (at 
such time and in such manner as the Secretary may 
provide) the application of this paragraph, para-
graph (1) shall be applied by substituting ‘‘December 
31, 2021’’ for ‘‘December 31, 2023’’. 
SEC. 203. EXTENSION OF 100 PERCENT BONUS DEPRECIA-
TION. 
(a) IN GENERAL.—Section 168(k)(6)(A) is amended— 
(1) in clause (i)— 
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(A) by striking ‘‘2023’’ and inserting 
‘‘2026’’, and 
(B) by adding ‘‘and’’ at the end, and 
(2) by striking clauses (ii), (iii), and (iv), and 
redesignating clause (v) as clause (ii). 
(b) PROPERTY WITH LONGER PRODUCTION PERI-
ODS.—Section 168(k)(6)(B) is amended— 
(1) in clause (i)— 
(A) by striking ‘‘2024’’ and inserting 
‘‘2027’’, and 
(B) by adding ‘‘and’’ at the end, and 
(2) by striking clauses (ii), (iii), and (iv), and 
redesignating clause (v) as clause (ii). 
(c) PLANTS BEARING FRUITS AND NUTS.—Section 
168(k)(6)(C) is amended— 
(1) in clause (i)— 
(A) by striking ‘‘2023’’ and inserting 
‘‘2026’’, and 
(B) by adding ‘‘and’’ at the end, and 
(2) by striking clauses (ii), (iii), and (iv), and 
redesignating clause (v) as clause (ii). 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
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tion shall apply to property placed in service after 
December 31, 2022. 
(2) PLANTS BEARING FRUITS AND NUTS.—The 
amendments made by subsection (c) shall apply to 
specified plants planted or grafted after December 31, 
2022. 
SEC. 204. INCREASE IN LIMITATIONS ON EXPENSING OF DE-
PRECIABLE BUSINESS ASSETS. 
(a) IN GENERAL.—Section 179(b) is amended— 
(1) by striking ‘‘$1,000,000’’ in paragraph (1) 
and inserting ‘‘$1,290,000’’, and 
(2) by striking ‘‘$2,500,000’’ in paragraph (2) 
and inserting ‘‘$3,220,000’’. 
(b) INFLATION ADJUSTMENT.—Section 179(b)(6) is 
amended— 
(1) by striking ‘‘2018’’ and inserting ‘‘2024 
(2018 in the case of the dollar amount in paragraph 
(5)(A))’’, and 
(2) by striking ‘‘ ‘calendar year 2017’’ and in-
serting ‘‘ ‘calendar year 2024’ (‘calendar year 2017’ 
in the case of the dollar amount in paragraph 
(5)(A))’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to property placed in service in taxable 
years beginning after December 31, 2023. 
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TITLE III—INCREASING GLOBAL 
COMPETITIVENESS 
Subtitle A—United States-Taiwan 
Expedited Double-Tax Relief Act 
SEC. 301. SHORT TITLE. 
This subtitle may be cited as the ‘‘United States-Tai-
wan Expedited Double-Tax Relief Act’’. 
SEC. 302. SPECIAL RULES FOR TAXATION OF CERTAIN RESI-
DENTS OF TAIWAN. 
(a) IN GENERAL.—Subpart D of part II of subchapter 
N of chapter 1 is amended by inserting after section 894 
the following new section: 
‘‘SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF 
TAIWAN. 
‘‘(a) CERTAIN
INCOME
FROM
UNITED
STATES 
SOURCES.— 
‘‘(1) INTEREST, DIVIDENDS, AND
ROYALTIES, 
ETC.— 
‘‘(A) IN GENERAL.—In the case of interest 
(other than original issue discount), dividends, 
royalties, 
amounts 
described 
in 
section 
871(a)(1)(C), and gains described in section 
871(a)(1)(D) received by or paid to a qualified 
resident of Taiwan— 
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‘‘(i) sections 871(a), 881(a), 1441(a), 
1441(c)(5), and 1442(a) shall each be ap-
plied by substituting ‘the applicable per-
centage 
(as 
defined 
in 
section 
894A(a)(1)(C))’ for ‘30 percent’ each place 
it appears, and 
‘‘(ii) sections 871(a), 881(a), and 
1441(c)(1) shall each be applied by sub-
stituting ‘a United States permanent estab-
lishment of a qualified resident of Taiwan’ 
for ‘a trade or business within the United 
States’ each place it appears. 
‘‘(B) EXCEPTIONS.— 
‘‘(i) IN GENERAL.—Subparagraph (A) 
shall not apply to— 
‘‘(I) any dividend received from 
or paid by a real estate investment 
trust which is not a qualified REIT 
dividend, 
‘‘(II) any amount subject to sec-
tion 897, 
‘‘(III) any amount received from 
or paid by an expatriated entity (as 
defined in section 7874(a)(2)) to a for-
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eign related person (as defined in sec-
tion 7874(d)(3)), and 
‘‘(IV) any amount which is in-
cluded in income under section 860C to 
the extent that such amount does not 
exceed an excess inclusion with respect 
to a REMIC. 
‘‘(ii) QUALIFIED REIT DIVIDEND.—For 
purposes of clause (i)(I), the term ‘qualified 
REIT dividend’ means any dividend re-
ceived from or paid by a real estate invest-
ment trust if such dividend is paid with re-
spect to a class of shares that is publicly 
traded and the recipient of the dividend is 
a person who holds an interest in any class 
of shares of the real estate investment trust 
of not more than 5 percent. 
‘‘(C) APPLICABLE PERCENTAGE.—For pur-
poses of applying subparagraph (A)(i)— 
‘‘(i) IN GENERAL.—Except as provided 
in clause (ii), the term ‘applicable percent-
age’ means 10 percent. 
‘‘(ii) 
SPECIAL
RULES
FOR
DIVI-
DENDS.— In the case of any dividend in re-
spect of stock received by or paid to a quali-
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fied resident of Taiwan, the applicable per-
centage shall be 15 percent (10 percent in 
the case of a dividend which meets the re-
quirements of subparagraph (D) and is re-
ceived by or paid to an entity taxed as a 
corporation in Taiwan). 
‘‘(D) REQUIREMENTS FOR LOWER DIVIDEND 
RATE.— 
‘‘(i) IN
GENERAL.—The requirements 
of this subparagraph are met with respect 
to any dividend in respect of stock in a cor-
poration if, at all times during the 12- 
month period ending on the date such stock 
becomes ex-dividend with respect to such 
dividend— 
‘‘(I) the dividend is derived by a 
qualified resident of Taiwan, and 
‘‘(II) such qualified resident of 
Taiwan has held directly at least 10 
percent (by vote and value) of the total 
outstanding shares of stock in such cor-
poration. 
For purposes of subclause (II), a person 
shall be treated as directly holding a share 
of stock during any period described in the 
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preceding sentence if the share was held by 
a corporation from which such person later 
acquired that share and such corporation 
was, at the time the share was acquired, 
both a connected person to such person and 
a qualified resident of Taiwan. 
‘‘(ii) 
EXCEPTION
FOR
RICS
AND 
REITS.—Notwithstanding clause (i), the re-
quirements of this subparagraph shall not 
be treated as met with respect to any divi-
dend paid by a regulated investment com-
pany or a real estate investment trust. 
‘‘(2) QUALIFIED WAGES.— 
‘‘(A) IN GENERAL.—No tax shall be imposed 
under this chapter (and no amount shall be 
withheld under section 1441(a) or chapter 24) 
with respect to qualified wages paid to a quali-
fied resident of Taiwan who— 
‘‘(i) is not a resident of the United 
States (determined without regard to sub-
section (c)(3)(E)), or 
‘‘(ii) is employed as a member of the 
regular component of a ship or aircraft op-
erated in international traffic. 
‘‘(B) QUALIFIED WAGES.— 
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‘‘(i) IN GENERAL.—The term ‘qualified 
wages’ means wages, salaries, or similar re-
munerations with respect to employment in-
volving the performance of personal services 
within the United States which— 
‘‘(I) are paid by (or on behalf of) 
any employer other than a United 
States person, and 
‘‘(II) are not borne by a United 
States permanent establishment of any 
person other than a United States per-
son. 
‘‘(ii) EXCEPTIONS.—Such term shall 
not include directors’ fees, income derived as 
an entertainer or athlete, income derived as 
a student or trainee, pensions, amounts 
paid with respect to employment with the 
United States, any State (or political sub-
division thereof), or any possession of the 
United States (or any political subdivision 
thereof), or other amounts specified in regu-
lations 
or 
guidance 
under 
subsection 
(f)(1)(F). 
‘‘(3) INCOME
DERIVED
FROM
ENTERTAINMENT 
OR ATHLETIC ACTIVITIES.— 
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‘‘(A) IN GENERAL.—No tax shall be imposed 
under this chapter (and no amount shall be 
withheld under section 1441(a) or chapter 24) 
with respect to income derived by an entertainer 
or athlete who is a qualified resident of Taiwan 
from personal activities as such performed in the 
United States if the aggregate amount of gross 
receipts from such activities for the taxable year 
do not exceed $30,000. 
‘‘(B) EXCEPTION.—Subparagraph (A) shall 
not apply with respect to— 
‘‘(i) income which is qualified wages 
(as defined in paragraph (2)(B), deter-
mined without regard to clause (ii) thereof), 
or 
‘‘(ii) income which is effectively con-
nected with a United States permanent es-
tablishment. 
‘‘(b) INCOME CONNECTED WITH A UNITED STATES 
PERMANENT ESTABLISHMENT OF A QUALIFIED RESIDENT 
OF TAIWAN.— 
‘‘(1) IN GENERAL.— 
‘‘(A) IN GENERAL.—In lieu of applying sec-
tions 871(b) and 882, a qualified resident of 
Taiwan that carries on a trade or business with-
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in the United States through a United States 
permanent establishment shall be taxable as pro-
vided in section 1, 11, 55, or 59A, on its taxable 
income which is effectively connected with such 
permanent establishment. 
‘‘(B) DETERMINATION
OF
TAXABLE
IN-
COME.—In determining taxable income for pur-
poses of paragraph (1), gross income includes 
only gross income which is effectively connected 
with the permanent establishment. 
‘‘(2) TREATMENT OF DISPOSITIONS OF UNITED 
STATES REAL PROPERTY.—In the case of a qualified 
resident of Taiwan, section 897(a) shall be applied— 
‘‘(A) by substituting ‘carried on a trade or 
business within the United States through a 
United States permanent establishment’ for ‘were 
engaged in a trade or business within the United 
States’, and 
‘‘(B) by substituting ‘such United States 
permanent establishment’ for ‘such trade or busi-
ness’. 
‘‘(3) TREATMENT OF BRANCH PROFITS TAXES.— 
In the case of any corporation which is a qualified 
resident of Taiwan, section 884 shall be applied— 
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‘‘(A) by substituting ‘10 percent’ for ‘30 
percent ’ in subsection (a) thereof, and 
‘‘(B) by substituting ‘a United States per-
manent establishment of a qualified resident of 
Taiwan’ for ‘the conduct of a trade or business 
within the United States’ in subsection (d)(1) 
thereof. 
‘‘(4) SPECIAL RULE WITH RESPECT TO INCOME 
DERIVED FROM CERTAIN ENTERTAINMENT OR ATH-
LETIC ACTIVITIES.— 
‘‘(A) IN
GENERAL.—Paragraph (1) shall 
not apply to the extent that the income is de-
rived— 
‘‘(i) in respect of entertainment or ath-
letic activities performed in the United 
States, and 
‘‘(ii) by a qualified resident of Taiwan 
who is not the entertainer or athlete per-
forming such activities. 
‘‘(B) EXCEPTION.—Subparagraph (A) shall 
not apply if the person described in subpara-
graph (A)(ii) is contractually authorized to des-
ignate the individual who is to perform such ac-
tivities. 
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‘‘(5) SPECIAL RULE WITH RESPECT TO CERTAIN 
AMOUNTS.—Paragraph (1) shall not apply to any in-
come which is wages, salaries, or similar remunera-
tion with respect to employment or with respect to 
any amount which is described in subsection 
(a)(2)(B)(ii). 
‘‘(c) QUALIFIED RESIDENT OF TAIWAN.—For purposes 
of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified resident 
of Taiwan’ means any person who— 
‘‘(A) is liable to tax under the laws of Tai-
wan by reason of such person’s domicile, resi-
dence, place of management, place of incorpora-
tion, or any similar criterion, 
‘‘(B) is not a United States person (deter-
mined without regard to paragraph (3)(E)), and 
‘‘(C) in the case of an entity taxed as a cor-
poration in Taiwan, meets the requirements of 
paragraph (2). 
‘‘(2) LIMITATION ON BENEFITS FOR CORPORATE 
ENTITIES OF TAIWAN.— 
‘‘(A) IN
GENERAL.—Subject to subpara-
graphs (E) and (F), an entity meets the require-
ments of this paragraph only if it— 
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‘‘(i) meets the ownership and income 
requirements of subparagraph (B), 
‘‘(ii) meets the publicly traded require-
ments of subparagraph (C), or 
‘‘(iii) meets the qualified subsidiary re-
quirements of subparagraph (D). 
‘‘(B) OWNERSHIP
AND
INCOME
REQUIRE-
MENTS.—The requirements of this subparagraph 
are met for an entity if— 
‘‘(i) at least 50 percent (by vote and 
value) of the total outstanding shares of 
stock in such entity are owned directly or 
indirectly by qualified residents of Taiwan, 
and 
‘‘(ii) less than 50 percent of such enti-
ty’s gross income (and in the case of an en-
tity that is a member of a tested group, less 
than 50 percent of the tested group’s gross 
income) is paid or accrued, directly or indi-
rectly, in the form of payments that are de-
ductible for purposes of the income taxes 
imposed by Taiwan, to persons who are 
not— 
‘‘(I) qualified residents of Taiwan, 
or 
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‘‘(II) United States persons who 
meet such requirements with respect to 
the United States as determined by the 
Secretary to be equivalent to the re-
quirements of this subsection (deter-
mined without regard to paragraph 
(1)(B)) with respect to residents of 
Taiwan. 
‘‘(C) PUBLICLY TRADED REQUIREMENTS.— 
An entity meets the requirements of this sub-
paragraph if— 
‘‘(i) the principal class of its shares 
(and any disproportionate class of shares) 
of such entity are primarily and regularly 
traded on an established securities market 
in Taiwan, or 
‘‘(ii) the primary place of management 
and control of the entity is in Taiwan and 
all classes of its outstanding shares de-
scribed in clause (i) are regularly traded on 
an established securities market in Taiwan. 
‘‘(D) QUALIFIED
SUBSIDIARY
REQUIRE-
MENTS.—An entity meets the requirement of this 
subparagraph if— 
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‘‘(i) at least 50 percent (by vote and 
value) of the total outstanding shares of the 
stock of such entity are owned directly or 
indirectly by 5 or fewer entities— 
‘‘(I) which meet the requirements 
of subparagraph (C), or 
‘‘(II) which are United States 
persons the principal class of the 
shares (and any disproportionate class 
of shares) of which are primarily and 
regularly traded on an established se-
curities market in the United States, 
and 
‘‘(ii) the entity meets the requirements 
of clause (ii) of subparagraph (B). 
‘‘(E) ONLY INDIRECT OWNERSHIP THROUGH 
QUALIFYING INTERMEDIARIES COUNTED.— 
‘‘(i) IN GENERAL.—Stock in an entity 
owned by a person indirectly through 1 or 
more other persons shall not be treated as 
owned by such person in determining 
whether the person meets the requirements 
of subparagraph (B)(i) or (D)(i) unless all 
such other persons are qualifying inter-
mediate owners. 
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‘‘(ii) QUALIFYING INTERMEDIATE OWN-
ERS.—The term ‘qualifying intermediate 
owner’ means a person that is— 
‘‘(I) a qualified resident of Tai-
wan, or 
‘‘(II) a resident of any other for-
eign country (other than a foreign 
country that is a foreign country of 
concern) that has in effect a com-
prehensive convention with the United 
States for the avoidance of double tax-
ation. 
‘‘(iii) SPECIAL RULE FOR QUALIFIED 
SUBSIDIARIES.—For purposes of applying 
subparagraph (D)(i), the term ‘qualifying 
intermediate owner’ shall include any per-
son who is a United States person who 
meets such requirements with respect to the 
United States as determined by the Sec-
retary to be equivalent to the requirements 
of this subsection (determined without re-
gard to paragraph (1)(B)) with respect to 
residents of Taiwan. 
‘‘(F) CERTAIN PAYMENTS NOT INCLUDED.— 
In determining whether the requirements of sub-
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paragraph (B)(ii) or (D)(ii) are met with re-
spect to an entity, the following payments shall 
not be taken into account: 
‘‘(i) Arm’s-length payments by the en-
tity in the ordinary course of business for 
services or tangible property. 
‘‘(ii) In the case of a tested group, 
intra-group transactions. 
‘‘(3) DUAL RESIDENTS.— 
‘‘(A) RULES FOR DETERMINATION OF STA-
TUS.— 
‘‘(i) IN GENERAL.—An individual who 
is an applicable dual resident and who is 
described in subparagraph (B), (C), or (D) 
shall be treated as a qualified resident of 
Taiwan. 
‘‘(ii) APPLICABLE DUAL RESIDENT.— 
For purposes of this paragraph, the term 
‘applicable dual resident’ means an indi-
vidual who— 
‘‘(I) is not a United States cit-
izen, 
‘‘(II) is a resident of the United 
States (determined without regard to 
subparagraph (E)), and 
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‘‘(III) would be a qualified resi-
dent of Taiwan but for paragraph 
(1)(B). 
‘‘(B) PERMANENT HOME.—An individual is 
described in this subparagraph if such indi-
vidual— 
‘‘(i) has a permanent home available to 
such individual in Taiwan, and 
‘‘(ii) does not have a permanent home 
available to such individual in the United 
States. 
‘‘(C) CENTER
OF
VITAL
INTERESTS.—An 
individual is described in this subparagraph if— 
‘‘(i) such individual has a permanent 
home available to such individual in both 
Taiwan and the United States, and 
‘‘(ii) such individual’s personal and 
economic relations (center of vital interests) 
are closer to Taiwan than to the United 
States. 
‘‘(D) HABITUAL ABODE.—An individual is 
described in this subparagraph if— 
‘‘(i) such individual— 
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‘‘(I) does not have a permanent 
home available to such individual in 
either Taiwan or the United States, or 
‘‘(II) has a permanent home 
available to such individual in both 
Taiwan and the United States but 
such individual’s center of vital inter-
ests under subparagraph (C)(ii) cannot 
be determined, and 
‘‘(ii) such individual has a habitual 
abode in Taiwan and not the United States. 
‘‘(E) UNITED STATES TAX TREATMENT OF 
QUALIFIED
RESIDENT
OF
TAIWAN.—Notwith-
standing section 7701, an individual who is 
treated as a qualified resident of Taiwan by rea-
son of this paragraph for all or any portion of 
a taxable year shall not be treated as a resident 
of the United States for purposes of computing 
such individual’s United States income tax li-
ability for such taxable year or portion thereof. 
‘‘(4) RULES OF SPECIAL APPLICATION.— 
‘‘(A) DIVIDENDS.—For purposes of apply-
ing this section to any dividend, paragraph 
(2)(D) shall be applied without regard to clause 
(ii) thereof. 
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‘‘(B) ITEMS OF INCOME EMANATING FROM 
AN ACTIVE TRADE OR BUSINESS IN TAIWAN.— 
For purposes of this section— 
‘‘(i) IN
GENERAL.—Notwithstanding 
the preceding paragraphs of this subsection, 
if an entity taxed as a corporation in Tai-
wan is not a qualified resident of Taiwan 
but meets the requirements of subpara-
graphs (A) and (B) of paragraph (1), any 
qualified item of income such entity derived 
from the United States shall be treated as 
income of a qualified resident of Taiwan. 
‘‘(ii) QUALIFIED ITEMS OF INCOME.— 
‘‘(I) 
IN
GENERAL.—The 
term 
‘qualified item of income’ means any 
item of income which emanates from, 
or is incidental to, the conduct of an 
active trade or business in Taiwan 
(other than operating as a holding 
company, providing overall super-
vision or administration of a group of 
companies, providing group financing, 
or making or managing investments 
(unless such making or managing in-
vestments is carried on by a bank, in-
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surance company, or registered securi-
ties dealer in the ordinary course of its 
business as such)). 
‘‘(II) SUBSTANTIAL ACTIVITY RE-
QUIREMENT.—An 
item 
of 
income 
which is derived from a trade or busi-
ness conducted in the United States or 
from a connected person shall be a 
qualified item of income only if the 
trade or business activity conducted in 
Taiwan to which the item is related is 
substantial in relation to the same or 
a complementary trade or business ac-
tivity carried on in the United States. 
For purposes of applying this sub-
clause, activities conducted by persons 
that are connected to the entity de-
scribed in clause (i) shall be deemed to 
be conducted by such entity. 
‘‘(iii) EXCEPTION.—This subparagraph 
shall not apply to any item of income de-
rived by an entity if at least 50 percent (by 
vote or value) of such entity is owned (di-
rectly or indirectly) or controlled by resi-
dents of a foreign country of concern. 
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‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—For 
purposes of this section— 
‘‘(1) UNITED
STATES
PERMANENT
ESTABLISH-
MENT.— 
‘‘(A) IN
GENERAL.—The term ‘United 
States permanent establishment’ means, with re-
spect to a qualified resident of Taiwan, a perma-
nent establishment of such resident which is 
within the United States. 
‘‘(B) SPECIAL RULE.—The determination of 
whether there is a permanent establishment of a 
qualified resident of Taiwan within the United 
States shall be made without regard to whether 
an entity which is taxed as a corporation in 
Taiwan and which is a qualified resident of Tai-
wan controls or is controlled by— 
‘‘(i) a domestic corporation, or 
‘‘(ii) any other person that carries on 
business in the United States (whether 
through a permanent establishment or oth-
erwise). 
‘‘(2) PERMANENT ESTABLISHMENT.— 
‘‘(A) IN GENERAL.—The term ‘permanent 
establishment’ means a fixed place of business 
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through which a trade or business is wholly or 
partly carried on. Such term shall include— 
‘‘(i) a place of management, 
‘‘(ii) a branch, 
‘‘(iii) an office, 
‘‘(iv) a factory, 
‘‘(v) a workshop, and 
‘‘(vi) a mine, an oil or gas well, a 
quarry, or any other place of extraction of 
natural resources. 
‘‘(B) SPECIAL RULES FOR CERTAIN TEM-
PORARY PROJECTS.— 
‘‘(i) IN GENERAL.—A building site or 
construction or installation project, or an 
installation or drilling rig or ship used for 
the exploration or exploitation of the sea bed 
and its subsoil and their natural resources, 
constitutes a permanent establishment only 
if it lasts, or the activities of the rig or ship 
lasts, for more than 12 months. 
‘‘(ii) DETERMINATION
OF
12-MONTH 
PERIOD.—For purposes of clause (i), the pe-
riod over which a building site or construc-
tion or installation project of a person lasts 
shall include any period of more than 30 
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days during which such person does not 
carry on activities at such building site or 
construction or installation project but con-
nected activities are carried on at such 
building site or construction or installation 
project by one or more connected persons. 
‘‘(C) HABITUAL
EXERCISE
OF
CONTRACT 
AUTHORITY
TREATED
AS
PERMANENT
ESTAB-
LISHMENT.—Notwithstanding subparagraphs (A) 
and (B), where a person (other than an agent of 
an independent status to whom subparagraph 
(D)(ii) applies) is acting on behalf of a trade or 
business of a qualified resident of Taiwan and 
has and habitually exercises an authority to con-
clude contracts that are binding on the trade or 
business, that trade or business shall be deemed 
to have a permanent establishment in the coun-
try in which such authority is exercised in re-
spect of any activities that the person undertakes 
for the trade or business, unless the activities of 
such person are limited to those described in sub-
paragraph (D)(i) that, if exercised through a 
fixed place of business, would not make this fixed 
place of business a permanent establishment 
under the provisions of that subparagraph. 
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‘‘(D) EXCLUSIONS.— 
‘‘(i) IN
GENERAL.—Notwithstanding 
subparagraphs (A) and (B), the term ‘per-
manent establishment’ shall not include— 
‘‘(I) the use of facilities solely for 
the purpose of storage, display, or de-
livery of goods or merchandise belong-
ing to the trade or business, 
‘‘(II) the maintenance of a stock 
of goods or merchandise belonging to 
the trade or business solely for the pur-
pose of storage, display, or delivery, 
‘‘(III) the maintenance of a stock 
of goods or merchandise belonging to 
the trade or business solely for the pur-
pose of processing by another trade or 
business, 
‘‘(IV) the maintenance of a fixed 
place of business solely for the purpose 
of purchasing goods or merchandise, or 
of collecting information, for the trade 
or business, 
‘‘(V) the maintenance of a fixed 
place of business solely for the purpose 
of carrying on, for the trade or busi-
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ness, any other activity of a pre-
paratory or auxiliary character, or 
‘‘(VI) the maintenance of a fixed 
place of business solely for any com-
bination of the activities mentioned in 
subclauses (I) through (V), provided 
that the overall activity of the fixed 
place of business resulting from this 
combination is of a preparatory or 
auxiliary character. 
‘‘(ii) BROKERS
AND
OTHER
INDE-
PENDENT
AGENTS.—A trade or business 
shall not be considered to have a permanent 
establishment in a country merely because 
it carries on business in such country 
through a broker, general commission agent, 
or any other agent of an independent sta-
tus, provided that such persons are acting 
in the ordinary course of their business as 
independent agents. 
‘‘(3) TESTED GROUP.—The term ‘tested group’ 
includes, with respect to any entity taxed as a cor-
poration in Taiwan, such entity and any other entity 
taxed as a corporation in Taiwan that— 
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‘‘(A) participates as a member with such 
entity in a tax consolidation, fiscal unity, or 
similar regime that requires members of the 
group to share profits or losses, or 
‘‘(B) shares losses with such entity pursuant 
to a group relief or other loss sharing regime. 
‘‘(4) CONNECTED PERSON.—Two persons shall be 
‘connected persons’ if one owns, directly or indirectly, 
at least 50 percent of the interests in the other (or, 
in the case of a corporation, at least 50 percent of the 
aggregate vote and value of the corporation’s shares) 
or another person owns, directly or indirectly, at least 
50 percent of the interests (or, in the case of a cor-
poration, at least 50 percent of the aggregate vote and 
value of the corporation’s shares) in each person. In 
any case, a person shall be connected to another if, 
based on all the relevant facts and circumstances, one 
has control of the other or both are under the control 
of the same person or persons. 
‘‘(5) FOREIGN COUNTRY OF CONCERN.—The term 
‘foreign country of concern’ has the meaning given 
such term under paragraph (7) of section 9901 of the 
William M. (Mac) Thornberry National Defense Au-
thorization Act for Fiscal Year 2021 (15 U.S.C. 
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4651(7)), as added by section 103(a)(4) of the CHIPS 
Act of 2022). 
‘‘(6) PARTNERSHIPS; BENEFICIARIES
OF
ES-
TATES AND TRUSTS.—For purposes of this section— 
‘‘(A) a qualified resident of Taiwan which 
is a partner of a partnership which carries on 
a trade or business within the United States 
through a United States permanent establish-
ment shall be treated as carrying on such trade 
or business through such permanent establish-
ment, and 
‘‘(B) a qualified resident of Taiwan which 
is a beneficiary of an estate or trust which car-
ries on a trade or business within the United 
States through a United States permanent estab-
lishment shall be treated as carrying on such 
trade or business through such permanent estab-
lishment. 
‘‘(7) DENIAL OF BENEFITS FOR CERTAIN PAY-
MENTS THROUGH HYBRID ENTITIES.—For purposes of 
this section, rules similar to the rules of section 894(c) 
shall apply. 
‘‘(e) APPLICATION.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to any period unless the Secretary has determined 
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that Taiwan has provided benefits to United States 
persons for such period that are reciprocal to the ben-
efits provided to qualified residents of Taiwan under 
this section. 
‘‘(2) PROVISION
OF
RECIPROCITY.—The Presi-
dent or his designee is authorized to exchange letters, 
enter into an agreement, or take other necessary and 
appropriate steps relative to Taiwan for the recip-
rocal provision of the benefits described in this sec-
tion. 
‘‘(f) REGULATIONS OR OTHER GUIDANCE.— 
‘‘(1) IN
GENERAL.—The Secretary shall issue 
such regulations or other guidance as may be nec-
essary or appropriate to carry out the provisions of 
this section, including such regulations or guidance 
for— 
‘‘(A) determining— 
‘‘(i) what constitutes a United States 
permanent establishment of a qualified resi-
dent of Taiwan, and 
‘‘(ii) income that is effectively con-
nected with such a permanent establish-
ment, 
‘‘(B) preventing the abuse of the provisions 
of this section by persons who are not (or who 
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should not be treated as) qualified residents of 
Taiwan, 
‘‘(C) requirements for record keeping and 
reporting, 
‘‘(D) rules to assist withholding agents or 
employers in determining whether a foreign per-
son is a qualified resident of Taiwan for pur-
poses of determining whether withholding or re-
porting is required for a payment (and, if with-
holding is required, whether it should be applied 
at a reduced rate), 
‘‘(E) 
the 
application 
of 
subsection 
(a)(1)(D)(i) to stock held by predecessor owners, 
‘‘(F) determining what amounts are to be 
treated as qualified wages for purposes of sub-
section (a)(2), 
‘‘(G) determining the amounts to which sub-
section (a)(3) applies, 
‘‘(H) defining established securities market 
for purposes of subsection (c), 
‘‘(I) the application of the rules of sub-
section (c)(4)(B), 
‘‘(J) the application of subsection (d)(6) 
and section 1446, 
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‘‘(K) determining ownership interests held 
by residents of a foreign country of concern, and 
‘‘(L) determining the starting and ending 
dates for periods with respect to the application 
of this section under subsection (e), which may 
be separate dates for taxes withheld at the source 
and other taxes. 
‘‘(2) REGULATIONS
TO
BE
CONSISTENT
WITH 
MODEL TREATY.—Any regulations or other guidance 
issued under this section shall, to the extent practical, 
be consistent with the provisions of the United States 
model income tax convention dated February 7, 
2016.’’. 
(b) CONFORMING
AMENDMENT
TO
WITHHOLDING 
TAX.—Subchapter A of chapter 3 is amended by adding 
at the end the following new section: 
‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 
TAIWAN. 
‘‘For reduced rates of withholding for certain residents 
of Taiwan, see section 894A.’’. 
(c) CLERICAL AMENDMENTS.— 
(1) The table of sections for subpart D of part 
II of subchapter N of chapter 1 is amended by insert-
ing after the item relating to section 894 the following 
new item: 
‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’. 
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(2) The table of sections for subchapter A of 
chapter 3 is amended by adding at the end the fol-
lowing new item: 
‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’. 
Subtitle B—United States-Taiwan 
Tax Agreement Authorization Act 
SEC. 311. SHORT TITLE. 
This subtitle may be cited as the ‘‘United States-Tai-
wan Tax Agreement Authorization Act’’. 
SEC. 312. DEFINITIONS. 
In this subtitle: 
(1) AGREEMENT.—The term ‘‘Agreement’’ means 
the tax agreement authorized by section 313(a). 
(2) 
APPROPRIATE
CONGRESSIONAL
COMMIT-
TEES.—The term ‘‘appropriate congressional commit-
tees’’ means— 
(A) the Committee on Foreign Relations 
and the Committee on Finance of the Senate; 
and 
(B) the Committee on Ways and Means of 
the House of Representatives. 
(3) APPROVAL
LEGISLATION.—The term ‘‘ap-
proval legislation’’ means legislation that approves 
the Agreement. 
(4) IMPLEMENTING
LEGISLATION.—The term 
‘‘implementing legislation’’ means legislation that 
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makes any changes to the Internal Revenue Code of 
1986 necessary to implement the Agreement. 
SEC. 313. AUTHORIZATION TO NEGOTIATE AND ENTER 
INTO AGREEMENT. 
(a) IN GENERAL.—Subsequent to a determination 
under section 894A(e)(1) of the Internal Revenue Code of 
1986 (as added by the United States-Taiwan Expedited 
Double-Tax Relief Act), the President is authorized to nego-
tiate and enter into a tax agreement relative to Taiwan. 
(b) ELEMENTS OF AGREEMENT.— 
(1) CONFORMITY WITH BILATERAL INCOME TAX 
CONVENTIONS.—The President shall ensure that— 
(A) any provisions included in the Agree-
ment conform with provisions customarily con-
tained in United States bilateral income tax 
conventions, as exemplified by the 2016 United 
States Model Income Tax Convention; and 
(B) the Agreement does not include elements 
outside the scope of the 2016 United States 
Model Income Tax Convention. 
(2) INCORPORATION OF TAX AGREEMENTS AND 
LAWS.—Notwithstanding paragraph (1), the Agree-
ment may incorporate and restate provisions of any 
agreement, or existing United States law, addressing 
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double taxation for residents of the United States and 
Taiwan. 
(3) AUTHORITY.—The Agreement shall include 
the following statement: ‘‘The Agreement is entered 
into pursuant to the United States-Taiwan Tax 
Agreement Authorization Act.’’ 
(4) ENTRY INTO FORCE.—The Agreement shall 
include a provision conditioning entry into force 
upon— 
(A) enactment of approval legislation and 
implementing legislation pursuant to section 
317; and 
(B) confirmation by the Secretary of the 
Treasury that the relevant authority in Taiwan 
has approved and taken appropriate steps re-
quired to implement the Agreement. 
SEC. 314. CONSULTATIONS WITH CONGRESS. 
(a) NOTIFICATION UPON COMMENCEMENT OF NEGO-
TIATIONS.—The President shall provide written notification 
to the appropriate congressional committees of the com-
mencement of negotiations between the United States and 
Taiwan on the Agreement at least 15 calendar days before 
commencing such negotiations. 
(b) CONSULTATIONS DURING NEGOTIATIONS.— 
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(1) BRIEFINGS.—Not later than 90 days after 
commencement of negotiations with respect to the 
Agreement, and every 180 days thereafter until the 
President enters into the Agreement, the President 
shall provide a briefing to the appropriate congres-
sional committees on the status of the negotiations, 
including a description of elements under negotiation. 
(2) MEETINGS AND OTHER CONSULTATIONS.— 
(A) IN GENERAL.—In the course of negotia-
tions with respect to the Agreement, the Sec-
retary of the Treasury, in coordination with the 
Secretary of State, shall— 
(i) meet, upon request, with the chair-
man or ranking member of any of the ap-
propriate congressional committees regard-
ing negotiating objectives and the status of 
negotiations in progress; and 
(ii) consult closely and on a timely 
basis with, and keep fully apprised of the 
negotiations, the appropriate congressional 
committees. 
(B) ELEMENTS
OF
CONSULTATIONS.—The 
consultations described in subparagraph (A) 
shall include consultations with respect to— 
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(i) the nature of the contemplated 
Agreement; 
(ii) how and to what extent the con-
templated Agreement is consistent with the 
elements set forth in section 313(b); and 
(iii) the implementation of the con-
templated Agreement, including— 
(I) the general effect of the con-
templated Agreement on existing laws; 
(II) proposed changes to any ex-
isting laws to implement the con-
templated Agreement; and 
(III) proposed administrative ac-
tions to implement the contemplated 
Agreement. 
SEC. 315. APPROVAL AND IMPLEMENTATION OF AGREE-
MENT. 
(a) IN GENERAL.—The Agreement may not enter into 
force unless— 
(1) the President, at least 60 days before the day 
on which the President enters into the Agreement, 
publishes the text of the contemplated Agreement on 
a publicly available website of the Department of the 
Treasury; and 
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(2) there is enacted into law, with respect to the 
Agreement, approval legislation and implementing 
legislation pursuant to section 317. 
(b) ENTRY INTO FORCE.—The President may provide 
for the Agreement to enter into force upon— 
(1) enactment of approval legislation and imple-
menting legislation pursuant to section 317; and 
(2) confirmation by the Secretary of the Treas-
ury that the relevant authority in Taiwan has ap-
proved and taken appropriate steps required to imple-
ment the Agreement. 
SEC. 316. SUBMISSION TO CONGRESS OF AGREEMENT AND 
IMPLEMENTATION POLICY. 
(a) SUBMISSION OF AGREEMENT.—Not later than 270 
days after the President enters into the Agreement, the 
President or the President’s designee shall submit to Con-
gress— 
(1) the final text of the Agreement; and 
(2) a technical explanation of the Agreement. 
(b) SUBMISSION OF IMPLEMENTATION POLICY.—Not 
later than 270 days after the President enters into the 
Agreement, the Secretary of the Treasury shall submit to 
Congress— 
(1) a description of those changes to existing 
laws that the President considers would be required in 
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order to ensure that the United States acts in a man-
ner consistent with the Agreement; and 
(2) a statement of anticipated administrative ac-
tion proposed to implement the Agreement. 
SEC. 317. CONSIDERATION OF APPROVAL LEGISLATION 
AND IMPLEMENTING LEGISLATION. 
(a) IN GENERAL.—The approval legislation with re-
spect to the Agreement shall include the following: ‘‘Con-
gress approves the Agreement submitted to Congress pursu-
ant to section 316 of the United States-Taiwan Tax Agree-
ment Authorization Act on llll.’’, with the blank 
space being filled with the appropriate date. 
(b) APPROVAL
LEGISLATION
COMMITTEE
REFER-
RAL.—The approval legislation shall— 
(1) in the Senate, be referred to the Committee 
on Foreign Relations; and 
(2) in the House of Representaives, be referred to 
the Committee on Ways and Means. 
(c) IMPLEMENTING LEGISLATION COMMITTEE REFER-
RAL.—The implementing legislation shall— 
(1) in the Senate, be referred to the Committee 
on Finance; and 
(2) in the House of Representatives, be referred 
to the Committee on Ways and Means. 
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