S199-119

In Committee

A bill to amend the Internal Revenue Code of 1986 to provide special rules for the taxation of certain residents of Taiwan with income from sources within the United States.

119th Congress Introduced Jan 23, 2025

Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.

Summary

What This Bill Does

This legislation addresses double taxation issues between the United States and Taiwan. It reduces U.S. withholding tax rates on income (interest, dividends, royalties, gains) paid to qualified Taiwan residents, and authorizes the President to negotiate a formal tax agreement with Taiwan modeled after standard U.S. tax treaties.

Who Benefits and How

Taiwanese investors, businesses, and individuals with U.S. income sources benefit from reduced tax withholding rates (down from 30% to lower rates). U.S. businesses operating in Taiwan may benefit from reciprocal treatment. Financial services firms handling cross-border Taiwan-U.S. transactions benefit from clearer tax rules.

Who Bears the Burden and How

The U.S. Treasury receives reduced tax revenue from lower withholding rates on payments to Taiwan residents. Congressional committees must review and approve any negotiated agreement, adding administrative process requirements.

Key Provisions

  • Reduces withholding tax rates on interest, dividends, royalties, and certain gains paid to qualified Taiwan residents
  • Authorizes President to negotiate formal tax agreement with Taiwan following 2016 Model Tax Convention
  • Requires congressional approval before any negotiated agreement can enter into force
  • Establishes consultation requirements between executive branch and congressional committees during negotiations

Evidence Chain:

This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers.

At a Glance

What This Bill Does

Provides tax relief for Taiwan residents with U.S. income by reducing withholding rates and authorizing negotiation of a comprehensive tax agreement between the United States and Taiwan.

Key Policy Areas

Taxation, International Trade, Foreign Relations

Primary Purpose

Provides tax relief for Taiwan residents with U.S. income by reducing withholding rates and authorizing negotiation of a comprehensive tax agreement between the United States and Taiwan.

Policy Domains

Taxation International Trade Foreign Relations

Title I - United States-Taiwan Expedited Double-Tax Relief Act

Identified Gains
Contextual inference, no direct clause citation
  • Taiwan investors in U.S. securities
  • Taiwan businesses with U.S. income
  • Financial services firms
  • Cross-border investment industry
Model: N/A | Version: bill_summary_v2 | Source: is

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • U.S. Treasury (reduced revenue)
  • IRS (implementation)
Model: N/A | Version: bill_summary_v2 | Source: is

Contextual inference, no direct clause citation

Title II - United States-Taiwan Tax Agreement Authorization Act

Identified Gains
Contextual inference, no direct clause citation
  • Taiwan investors
  • U.S. businesses in Taiwan
  • Bilateral trade relations
Model: N/A | Version: bill_summary_v2 | Source: is

Contextual inference, no direct clause citation

Identified Costs
Contextual inference, no direct clause citation
  • Executive branch (negotiation requirements)
  • Congressional committees (review obligations)
Model: N/A | Version: bill_summary_v2 | Source: is

Contextual inference, no direct clause citation

Legislative Progress

In Committee
Introduced Committee Passed
Jan 23, 2025

Mr. Crapo (for himself, Mr. Risch, Mr. Wyden, and Mrs. …

Jan 23, 2025

Read twice and referred to the Committee on Finance.

Jan 23, 2025

Introduced in Senate

Stakeholder Effects

cui bono?

How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.

Government
11 mentions across 7 clauses
+2 positive -9 negative

Congress, Congressional committees (Foreign Relations, Finance, Ways and Means), Department of the Treasury

Positive-direction: Executive Branch, Taiwan as a trading partner

Negative-direction: Congress, Congressional committees (Foreign Relations, Finance, Ways and Means), Department of the Treasury, Executive Branch (President and Treasury), Executive Branch (President), U.S. Treasury

Financial Services
4 mentions across 2 clauses
+3 positive -1 negative

Taiwan individual investors in U.S. securities, Taiwan institutional investors, Taiwan residents receiving U.S. investment income

Positive-direction: Taiwan individual investors in U.S. securities, Taiwan institutional investors, Taiwan residents receiving U.S. investment income

Negative-direction: U.S. withholding agents for Taiwan payments

Technology
2 mentions across 2 clauses
+2 positive

Taiwan businesses with U.S. royalty income, Taiwan technology companies with U.S. licensing revenue

Cross-border Investment
1 mention across 1 clause
+1 positive

Taiwan investors and businesses

Large Corporations
1 mention across 1 clause
+1 positive

U.S. businesses operating in Taiwan

Real Estate
1 mention across 1 clause
?1 uncertain

Real Estate Investment Trusts (REITs)

13/14
sections analyzed
Full impact breakdown

Bill Structure & Actor Mappings

Who is "The Secretary" in each section?

Domains
Taxation
Actor Mappings
"the_secretary"
→ Secretary of the Treasury
Domains
Taxation Foreign Relations International Trade
Actor Mappings
"the_president"
→ President of the United States
"the_secretary"
→ Secretary of the Treasury

Note: 'The Secretary' refers to Secretary of the Treasury throughout both titles, though Title II also involves coordination with Secretary of State for negotiations

Key Definitions

Terms defined in this bill

7 terms
"Agreement" §202(a)

The tax agreement authorized by section 203(a) between the United States and Taiwan

"appropriate congressional committees" §202(b)

The Committee on Foreign Relations and Committee on Finance of the Senate; and the Committee on Ways and Means of the House of Representatives

"approval legislation" §202(c)

Legislation that approves the Agreement

"implementing legislation" §202(d)

Legislation that makes any changes to the Internal Revenue Code of 1986 necessary to implement the Agreement

"applicable percentage" §894A(applicable_pct)

The reduced withholding rate substituted for the standard 30 percent rate

"qualified REIT dividend" §894A(qualified_reit)

A dividend from a real estate investment trust paid with respect to publicly traded shares to a holder of any class

"qualified resident of Taiwan" §894A(qualified_resident)

A resident of Taiwan meeting specific criteria for reduced withholding treatment

We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.

Learn more about our methodology