poration in Taiwan, such entity and any other entity 
taxed as a corporation in Taiwan that— 
‘‘(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 pursu-
ant to a group relief or other loss sharing re-
gime. 
‘‘(4) CONNECTED PERSON.—Two persons shall 
be ‘connected persons’ if one owns, directly or indi-
rectly, 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 cor-
poration’s shares) or another person owns, directly 
or indirectly, at least 50 percent of the interests (or, 
in the case of a corporation, 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 
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given such term under paragraph (7) of section 
9901 of the William M. (Mac) Thornberry National 
Defense Authorization Act for Fiscal Year 2021 (15 
U.S.C. 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 es-
tablishment shall be treated as carrying on such 
trade or business through such permanent es-
tablishment. 
‘‘(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. 
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‘‘(e) APPLICATION.— 
‘‘(1) IN GENERAL.—This section shall not apply 
to any period unless the Secretary has determined 
that Taiwan has provided benefits to United States 
persons for such period that are reciprocal to the 
benefits provided to qualified residents of Taiwan 
under this section. 
‘‘(2) PROVISION OF RECIPROCITY.—The Presi-
dent or his designee is authorized to exchange let-
ters, enter into an agreement, or take other nec-
essary and appropriate steps relative to Taiwan for 
the reciprocal provision of the benefits described in 
this section. 
‘‘(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 
resident of Taiwan, and 
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‘‘(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 
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 own-
ers, 
‘‘(F) determining what amounts are to be 
treated as qualified wages for purposes of sub-
section (a)(2), 
‘‘(G) determining the amounts to which 
subsection (a)(3) applies, 
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‘‘(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, 
‘‘(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 prac-
tical, 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 of the Internal Revenue 
Code of 1986 is amended by adding at the end the fol-
lowing new section: 
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‘‘SEC. 1447. WITHHOLDING FOR QUALIFIED RESIDENTS OF 
TAIWAN. 
‘‘For reduced rates of withholding for certain resi-
dents 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 of the Internal Rev-
enue Code of 1986 is amended by inserting after the 
item relating to section 894 the following new item: 
‘‘Sec. 894A. Special rules for qualified residents of Taiwan.’’. 
(2) The table of sections for subchapter A of 
chapter 3 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 1447. Withholding for qualified residents of Taiwan.’’. 
Æ 
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