Taiwan’s Finance Minister, Chuang Tsui-yun, has expressed optimism in reaching a long-discussed tax agreement with the United States by mid-2023. This mutually beneficial tax treaty is expected to promote increased investment and has been a top priority for Taipei.
In July, both Republican and Democratic members of the U.S. House of Representatives introduced legislation granting President Joe Biden’s administration the authority to negotiate this crucial tax agreement with Taiwan.
The lawmakers contend that this tax agreement, akin to a treaty, will encourage investment, combat tax evasion, and prevent double taxation for businesses in both the United States and Taiwan.
Speaking in parliament, Minister Chuang revealed her intention to capitalize on her attendance at a meeting of the Asia Pacific Economic Cooperation (APEC) next month in the United States. During the APEC gathering, Chuang plans to hold discussions with U.S. Treasury Secretary Janet Yellen regarding the tax agreement.
The core objectives of this agreement are to address issues such as double taxation of personal income and corporate profits. Once signed, it is expected to create a more favorable environment for attracting increased investments.
“We hope that it can be signed before June next year. After signing it, the procedures on our side can be completed soon, and the bilateral agreement will take effect,” Chuang emphasized.
Taiwanese companies have collectively invested $28.5 billion in the United States, while U.S. companies have reciprocated with $26.6 billion in investments within Taiwan.
It’s important to note that the absence of formal diplomatic relations between Washington and Taipei has led to the double taxation of income for Taiwanese businesses and individuals by both the U.S. and Taiwanese governments.
As a prominent global supplier of semiconductor chips that are crucial for a wide range of consumer goods and military equipment, Taiwan has garnered considerable attention. Washington has been actively encouraging Taiwanese chip companies to establish manufacturing facilities within the United States.
Taiwan Semiconductor Manufacturing Co Ltd (TSMC), the world’s largest contract chipmaker, has committed to investing $40 billion in factories located in the U.S. state of Arizona.
