Sets reduced U.S. withholding tax rates on certain U.S.-source income paid to Taiwan residents, and authorizes the President to negotiate a tax agreement with Taiwan, with the reduced rates applying only if Taiwan provides reciprocal benefits to U.S. persons.

• Adds Internal Revenue Code section 894A, setting a 10 percent U.S. tax rate on certain interest, royalties, and dividends paid to qualified Taiwan residents, with dividends generally taxed at 15 percent and 10 percent for qualifying Taiwan corporate shareholders.
• Exempts from U.S. tax and withholding certain wages earned by Taiwan residents who are not U.S. residents for work performed in the United States, and entertainer or athlete income up to $30,000 in gross receipts per year.
• Applies the new rules only for periods when the Treasury Secretary determines that Taiwan provides reciprocal benefits to United States persons.
• Authorizes the President to negotiate a tax agreement with Taiwan, requires publishing the text at least 60 days before signing, requires briefings to Congress during negotiations, and conditions entry into force on enacted approval and implementing legislation.

• Rules Committee (House)
• Ways and Means Committee (House)
• Finance Committee (Senate)

Taxation