Taiwan Tax Agreement Act of 2023

II Calendar No. 151 118TH CONGRESS 1ST SESSION S. 1457 To authorize negotiation and conclusion and to provide for congressional consideration of a tax agreement between the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO). IN THE SENATE OF THE UNITED STATES MAY 4, 2023 Mr. MENENDEZ (for himself, Mr. RISCH, Mr. VAN HOLLEN, Mr. ROMNEY, Mr. RICKETTS, Mr. RUBIO, Mr. GRAHAM, Ms. MURKOWSKI, Mr. SCOTT of Florida, Mr. WICKER, Mr. SULLIVAN, Mr. KAINE, Mrs. SHAHEEN, Ms. DUCKWORTH, Mr. COONS, Mr. MERKLEY, and Mr. HAGERTY) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations JULY 25, 2023 Reported by Mr. MENENDEZ, with an amendment [Strike out all after the enacting clause and insert the part printed in italic] A BILL To authorize negotiation and conclusion and to provide for congressional consideration of a tax agreement between the American Institute in Taiwan (AIT) and the Taipei Economic and Cultural Representative Office (TECRO). Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1457 RS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Taiwan Tax Agree- 2 ment Act of 2023’’. 3 SEC. 2. FINDINGS. 4 Congress makes the following findings: 5 (1) The United States has entered into tax 6 treaties covering 65 jurisdictions, which facilitate 7 economic activity, strengthen bilateral cooperation, 8 and benefit United States businesses and other 9 United States taxpayers. 10 (2) Taiwan is a one of the largest trading part- 11 ners of the United States and one of the world’s 12 largest economies, and further bolstering economic 13 ties between the United States and Taiwan remains 14 critical, especially given Taiwan’s strategic impor- 15 tance and the increasing threat posed by the Peo- 16 ple’s Republic of China. 17 (3) A tax agreement with Taiwan would play a 18 key role in facilitating and promoting increased bi- 19 lateral investment and trade between the United 20 States and Taiwan, fortifying the relationship be- 21 tween the two more generally, and encouraging other 22 nations to increase their economic linkages to Tai- 23 wan. 24 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1457 RS SEC. 3. AUTHORIZATION TO NEGOTIATE AND CONCLUDE. 1 (a) IN GENERAL.—The President is authorized to ne- 2 gotiate and enter into a tax agreement relative to Taiwan 3 through the American Institute in Taiwan (AIT) (herein- 4 after the ‘‘Agreement’’). 5 (b) ELEMENTS OF AGREEMENT.—The Agreement 6 authorized to be negotiated and concluded under this sec- 7 tion shall conform with the provisions customarily con- 8 tained in United States bilateral income tax conventions, 9 as exemplified by the 2016 United States Model Income 10 Tax Convention, and shall include the following elements: 11 (1) Application to tax residents of the United 12 States, Taiwan, or both, exclusive of enterprises per- 13 manently established in the People’s Republic of 14 China or in third States that do not have a com- 15 prehensive income tax treaty with the United States. 16 (2) Relief from double taxation. 17 (3) Measures aimed at limiting the risk of tax 18 evasion or avoidance. 19 (4) Entry into force conditioned upon confirma- 20 tion by the President of approval by the United 21 States Congress, as described in section 4, and rel- 22 evant authority in Taiwan and necessary steps taken 23 to enable implementation. 24 (c) LIMITATION.—The Agreement authorized to be 25 negotiated and concluded under this section may not in- 26 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1457 RS clude elements outside the scope of the 2016 United 1 States Model Income Tax Convention. 2 SEC. 4. CONSULTATION. 3 (a) NOTIFICATION UPON COMMENCEMENT OF NEGO- 4 TIATIONS.—The President shall provide written notifica- 5 tion to the appropriate congressional committees of the 6 commencement of negotiations between AIT and TECRO 7 on the Agreement at least 15 calendar days before such 8 commencement. 9 (b) REPORTS.—Not later than 90 days after com- 10 mencement of negotiations on the Agreement, and every 11 180 days thereafter until conclusion of the Agreement, the 12 President shall submit a report to the appropriate con- 13 gressional committees providing an update on the status 14 of negotiations, including a description of elements under 15 negotiation. 16 (c) CONSULTATIONS DURING NEGOTIATIONS.—In 17 the course of negotiations conducted under the authorities 18 of this Act, the Secretary of the Treasury, in coordination 19 with the Secretary of State, shall— 20 (1) meet, upon request, with the Chairman or 21 Ranking Member of the appropriate congressional 22 committees regarding negotiating objectives and the 23 status of negotiations in progress; and 24 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1457 RS (2) consult closely, on a timely basis, and keep 1 fully apprised of the negotiations, the appropriate 2 congressional committees. 3 SEC. 5. APPROVAL OF THE AGREEMENT. 4 (a) SUBMISSION OF AGREEMENT.—Not later than 30 5 days after the Agreement is concluded, the Secretary of 6 State shall provide the Agreement and technical expla- 7 nation to the appropriate congressional committees. 8 (b) APPROVAL.—The Agreement shall not take effect 9 until after Congress passes a concurrent resolution of ap- 10 proval as described in subsection (c). 11 (c) TERMS OF CONCURRENT RESOLUTION OF AP- 12 PROVAL.— 13 (1) IN GENERAL.—For purposes of subsection 14 (b), the term ‘‘concurrent resolution of approval’’ 15 means only a concurrent resolution— 16 (A) which does not have a preamble; 17 (B) which includes in the matter after the 18 resolving clause the following: ‘‘That Congress 19 approves the Tax Agreement concluded between 20 the American Institute in Taiwan and the Tai- 21 pei Economic and Cultural Representative Of- 22 fice, as submitted by the President on 23 llll.’’, the blank space being filled in with 24 the appropriate date; and 25 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6401 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1457 RS (C) the title of which is as follows: ‘‘Con- 1 current resolution approving the Tax Agree- 2 ment concluded between the American Institute 3 in Taiwan and the Taipei Economic and Cul- 4 tural Representative Office.’’. 5 (2) REFERRAL.—A resolution described in this 6 subsection that is introduced in the Senate shall be 7 referred to the Committee on Foreign Relations of 8 the Senate. A resolution described in this subsection 9 that is introduced in the House of Representatives 10 shall be referred to the Committee on Foreign Af- 11 fairs of the House of Representatives. 12 SEC. 6. ENTRY INTO FORCE AND LEGAL EFFECT OF THE 13 AGREEMENT. 14 (a) ENTRY INTO FORCE.—Upon passage of the con- 15 current resolution of approval, the President may bring 16 the Agreement into force. 17 (b) LEGAL EFFECT.—Upon entry into force, the 18 Agreement shall be afforded the same treatment as a trea- 19 ty for purposes of the laws of the United States. 20 SEC. 7. APPROPRIATE CONGRESSIONAL COMMITTEES DE- 21 FINED. 22 In this section, the term ‘‘appropriate congressional 23 committees’’ means the Committee on Foreign Relations 24 and the Committee on Finance of the Senate and the 25 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6401 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1457 RS Committee on Foreign Affairs and the Committee on 1 Ways and Means of the House of Representatives. 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Taiwan Tax Agreement 4 Act of 2023’’. 5 SEC. 2. FINDINGS. 6 Congress makes the following findings: 7 (1) The United States has entered into tax trea- 8 ties covering 65 jurisdictions, which facilitate eco- 9 nomic activity, strengthen bilateral cooperation, and 10 benefit United States businesses and other United 11 States taxpayers. 12 (2) Taiwan is a one of the largest trading part- 13 ners of the United States and one of the world’s larg- 14 est economies, and further bolstering economic ties be- 15 tween the United States and Taiwan remains critical, 16 especially given Taiwan’s strategic importance and 17 the increasing threat posed by the People’s Republic 18 of China. 19 (3) A tax agreement with Taiwan would play a 20 key role in facilitating and promoting increased bi- 21 lateral investment and trade between the United 22 States and Taiwan, fortifying the relationship be- 23 tween the two more generally, and encouraging other 24 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1457 RS nations to increase their economic linkages to Tai- 1 wan. 2 SEC. 3. AUTHORIZATION TO NEGOTIATE AND CONCLUDE. 3 (a) IN GENERAL.—The President is authorized to ne- 4 gotiate and enter into a tax agreement relative to Taiwan 5 through the American Institute in Taiwan (AIT) (herein- 6 after the ‘‘Agreement’’). 7 (b) ELEMENTS OF AGREEMENT.—The Agreement au- 8 thorized to be negotiated and concluded under this section 9 shall conform with the provisions customarily contained in 10 United States bilateral income tax conventions, as exempli- 11 fied by the 2016 United States Model Income Tax Conven- 12 tion, and shall include the following elements: 13 (1) Application to tax residents of the United 14 States, Taiwan, or both, exclusive of enterprises 15 headquartered in the People’s Republic of China or in 16 third states that do not have a comprehensive income 17 tax treaty with the United States. 18 (2) Relief from double taxation. 19 (3) Measures aimed at limiting the risk of tax 20 evasion or avoidance. 21 (4) Entry into force conditioned upon confirma- 22 tion by the President of approval by the United 23 States Congress, as described in section 5, and rel- 24 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1457 RS evant authority in Taiwan and necessary steps taken 1 to enable implementation. 2 (c) LIMITATION.—The Agreement authorized to be ne- 3 gotiated and concluded under this section may not include 4 elements outside the scope of the 2016 United States Model 5 Income Tax Convention. 6 SEC. 4. CONSULTATION. 7 (a) NOTIFICATION UPON COMMENCEMENT OF NEGO- 8 TIATIONS.—The President shall provide written notification 9 to the appropriate congressional committees of the com- 10 mencement of negotiations between AIT and TECRO on the 11 Agreement at least 15 calendar days before such commence- 12 ment. 13 (b) BRIEFINGS.—Not later than 90 days after com- 14 mencement of negotiations on the Agreement, and every 180 15 days thereafter until conclusion of the Agreement, the Presi- 16 dent shall provide a briefing to the appropriate congres- 17 sional committees providing an update on the status of ne- 18 gotiations, including a description of elements under nego- 19 tiation. 20 (c) CONSULTATIONS DURING NEGOTIATIONS.—In the 21 course of negotiations conducted under the authorities of 22 this Act, the Secretary of the Treasury, in coordination with 23 the Secretary of State, shall— 24 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1457 RS (1) meet, upon request, with the Chairman or 1 Ranking Member of the appropriate congressional 2 committees regarding negotiating objectives and the 3 status of negotiations in progress; and 4 (2) consult closely, on a timely basis, and keep 5 fully apprised of the negotiations, the appropriate 6 congressional committees. 7 SEC. 5. APPROVAL OF THE AGREEMENT. 8 (a) SUBMISSION OF AGREEMENT.—Not later than 180 9 days after the Agreement is concluded, the Secretary of 10 State shall provide the Agreement and technical expla- 11 nation to the appropriate congressional committees. 12 (b) APPROVAL.—The Agreement shall not take effect 13 until after Congress passes a concurrent resolution of ap- 14 proval as described in subsection (c). 15 (c) TERMS OF CONCURRENT RESOLUTION OF AP- 16 PROVAL.— 17 (1) IN GENERAL.—For purposes of subsection 18 (b), the term ‘‘concurrent resolution of approval’’ 19 means only a concurrent resolution— 20 (A) which does not have a preamble; 21 (B) which includes in the matter after the 22 resolving clause the following: ‘‘That Congress 23 approves the Tax Agreement concluded between 24 the American Institute in Taiwan and the Tai- 25 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1457 RS pei Economic and Cultural Representative Of- 1 fice, as submitted by the President on 2 llll.’’, the blank space being filled in with 3 the appropriate date; and 4 (C) the title of which is as follows: ‘‘Concur- 5 rent resolution approving the Tax Agreement 6 concluded between the American Institute in 7 Taiwan and the Taipei Economic and Cultural 8 Representative Office.’’. 9 (2) REFERRAL.— A resolution described in this 10 subsection that is introduced in the Senate shall be re- 11 ferred to the Committee on Foreign Relations of the 12 Senate. A resolution described in this subsection that 13 is introduced in the House of Representatives shall be 14 referred to the Committee on Foreign Affairs of the 15 House of Representatives. 16 SEC. 6. ENTRY INTO FORCE AND LEGAL EFFECT OF THE 17 AGREEMENT. 18 (a) ENTRY INTO FORCE.—Upon passage of the concur- 19 rent resolution of approval, the President may bring the 20 Agreement into force. 21 (b) LEGAL EFFECT.—Upon entry into force, the Agree- 22 ment shall be afforded the same treatment as a treaty for 23 purposes of the laws of the United States. 24 VerDate Sep 11 2014 05:22 Jul 26, 2023 Jkt 039200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\S1457.RS S1457 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1457 RS SEC. 7. APPROPRIATE CONGRESSIONAL COMMITTEES DE- 1 FINED. 2 In this section, the term ‘‘appropriate congressional 3 committees’’ means the Committee on Foreign Relations 4 and th [Text truncated for display. Full text available on Congress.gov.]