HR-33 : Still Just a Bill

The House of Representatives bill H.R. 33, titled the "United States-Taiwan Expedited Double-Tax Relief Act," aims to alleviate double taxation for certain residents of Taiwan with income sourced within the United States. Key provisions include:

• Tax Reductions: Modifies tax rates on interest, dividends, royalties, and certain gains received by qualified Taiwanese residents, generally lowering the rate to 10% (15% for some dividends).
• Wage Exemptions: Exempts qualified wages paid to Taiwanese residents working temporarily in the U.S. from U.S. income tax.
• Income Threshold: Sets a $30,000 threshold below which income derived by entertainers or athletes from Taiwan performing in the United States is exempt from taxation.
• Permanent Establishment Rules: Provides rules for taxing Taiwanese residents who conduct business in the U.S. through a permanent establishment, such as a branch or office.
• Corporate Benefit Limitations: Establishes specific requirements for Taiwanese corporate entities to qualify for the tax benefits, including ownership and income criteria.
• Dual Residency: Provides specific criteria for determining residency for individuals who are residents of both the U.S. and Taiwan.
• Reciprocity: Requires the Secretary of the Treasury to determine that Taiwan provides reciprocal benefits to U.S. persons before the provisions of this section take effect.

Title II, the "United States-Taiwan Tax Agreement Authorization Act," authorizes the President to negotiate and enter into a tax agreement with Taiwan, subject to Congressional approval. Key provisions include:

• Negotiation Authority: Grants the President authority to negotiate a tax agreement with Taiwan after a determination has been made that Taiwan has provided reciprocal benefits to US persons.
• Congressional Consultation: Mandates regular consultations with specific Congressional committees during the negotiation process.
• Approval Process: Requires Congressional approval and implementing legislation before the agreement can enter into force.
• Agreement Scope: Specifies that the agreement should conform to standard U.S. bilateral income tax conventions, but can incorporate existing agreements or laws addressing double taxation.