Taiwan and the US are to begin negotiations in the coming weeks to work on an agreement to address double taxation issues, the US Department of State said yesterday.
Both sides have said such an agreement would foster more investment, and Taipei has long pushed for it.
The move was announced as American Institute in Taiwan Managing Director Ingrid Larson arrived in Taipei yesterday.
Photo: Bloomberg
Washington and Taipei do not have formal diplomatic relations, so the lack of a tax agreement means Taiwanese businesses and individuals are taxed on their income by both the Taiwanese and US governments.
The US Treasury Department said the action builds on congressional initiatives and the administration would work with Congress on legislation to approve an agreement.
“A comprehensive tax agreement will provide critical benefits for both the United States and Taiwan,” it said.
“In particular, this action will support the CHIPS and Science Act’s aims of strengthening the resilience of the semiconductor supply chain, creating jobs and incentivizing investments in semiconductor manufacturing facilities across the United States,” the department said in a statement.
“It will reduce double taxation barriers for further investment by Taiwan into the United States, and vice versa, particularly for the small and medium-sized enterprises that are crucial to a complete semiconductor ecosystem,” it added.