Congressman Gerry Connolly (D-VA), a senior member of the House Committee on Foreign Affairs, co-Chair of the Congressional Taiwan Caucus, and the author of the Taiwan Tax Agreement Act of 2023, led four of his colleagues in writing to Secretary of State Antony Blinken and Secretary of the Treasury Janet Yellen to urge the Administration to take action on the issue of double taxation with Taiwan.

The announcement was made on 18 October 2024.

In addition to Connolly, the letter was signed by Congressman Greg Meeks (D-NY), the Ranking Member of the House Committee on Foreign Affairs; Congressman Joe Wilson (R-SC), the Chairman of the House Subcommittee on the Middle East, North Africa, and Central Asia; Congressman Ami Bera (D-CA), the Ranking Member of the House Subcommittee on the Indo-Pacific and a co-Chair of the Congressional Taiwan Caucus; and Congressman Greg Stanton (D-AZ), a member of the House Committee on Foreign Affairs.

“As supporters of strong commercial ties between the US and Taiwan, we write to urge you to take action to remedy double taxation burdens as we await the Senate passage of Taiwan-related provisions in the Tax Relief for American Families and Workers Act of 2024,” wrote the Members.

“While we continue to believe legislative action in the Senate, namely the authorization included in the Tax Relief for American Families and Workers Act of 2024, is needed to conclude a double taxation agreement, we welcome the Administration’s desire to begin negotiations between the American Institute in Taiwan and the Taiwan Economic and Cultural Representative Office on said agreement,” the Members continued. “We urge that such negotiations begin in earnest and that the Departments of State and Treasury use existing statutory authority to lower these barriers to trade in order to facilitate investment, protect against tax evasion, and shield businesses and individuals in the US and Taiwan from the strain that double taxation causes.”

“Taiwan has grown to be an economic juggernaut in the Indo-Pacific and around the world. We must ensure that companies from the US and Taiwan are not disadvantaged in conducting bilateral investment. Curing double taxation will be a clear reassertion of our support for a strong and prosperous Taiwan, for its own sake and as a bulwark against an increasingly aggressive China,” the Members concluded.

The Letter

Dear Secretary Blinken and Secretary Yellen:

As supporters of strong commercial ties between the US and Taiwan, we write to urge you to take action to remedy double taxation burdens as we await the Senate passage of Taiwan-related provisions in the Tax Relief for American Families and Workers Act of 2024.

While we continue to believe legislative action in the Senate, namely the authorization included in the Tax Relief for American Families and Workers Act of 2024, is needed to conclude a double taxation agreement, we welcome the Administration’s desire to begin negotiations between the American Institute in Taiwan and the Taiwan Economic and Cultural Representative Office on said agreement. We urge that such negotiations begin in earnest and that the Departments of State and Treasury use existing statutory authority to lower these barriers to trade in order to facilitate investment, protect against tax evasion, and shield businesses and individuals in the US and Taiwan from the strain that double taxation causes.

As one of the world’s largest economies and a major regional player, Taiwan is a critical economic partner for the United States. Taiwan is the United States’ seventh-largest merchandise trading partner, with USD 128 billion in total goods trade. The US, meanwhile, is Taiwan’s second-largest trading partner. In 2023 alone, US direct investment stock in Taiwan grew to USD 19.3 billion, with Taiwan’s direct investment stock in the United States reaching USD 15.6 billion, a testament to our ever-growing bilateral economic partnership.

We must do all we can to strengthen that partnership – including by implementing a tax agreement that removes unnecessary barriers and benefits businesses in both the US and Taiwan. As we await Senate action on Taiwan-related provisions in the bipartisan Tax Relief for American Families and Workers Act, including an authorization for the American Institute in Taiwan and Taiwan Economic and Cultural Representative Office to negotiate a tax agreement, we urge you to take interim steps to allow businesses on either side to invest without the burden of double taxation.

Taiwan has grown to be an economic juggernaut in the Indo-Pacific and around the world. We must ensure that companies from the US and Taiwan are not disadvantaged in conducting bilateral investment. Curing double taxation will be a clear reassertion of our support for a strong and prosperous Taiwan, for its own sake and as a bulwark against an increasingly aggressive China.