The Taiwanese semiconductor company TSMC is expanding its investment in the U.S., attracting other companies in the semiconductor supply chain to follow suit. However, Finance Minister Chuang Tsui-yun (莊翠雲) highlighted at the Legislature’s Finance Committee on Thursday that double taxation remains a significant obstacle for these companies without a tax agreement between Taiwan and the U.S. Chuang stated that the Finance Ministry would leverage this opportunity to urge the U.S. to finalize the Taiwan-U.S. Agreement to Avoid Double Taxation (ADTA).
The U.S. Senate Committee on Finance unanimously approved related legislation in September 2023, aimed at reducing withholding rates on certain U.S.-source income for Taiwanese businesses through amendments to U.S. tax law. The legislation requires Taiwan to provide completely reciprocal benefits for it to become effective. More than a year later, with President Trump's administration and a new Congress in place, the agreement still awaits final approval.
Minister Chuang noted that the two ADTA bills passed by the House of Representatives contain identical content to those of the previous Congress and are currently awaiting Senate review. Upon Senate approval and presidential signature, Taiwan and the U.S. can formally sign the agreement based on principles of reciprocity and equality.
President Lai Ching-te (賴清德) also emphasized the importance of the tax agreement during a recent meeting with the Arizona governor's delegation. He identified the taxation agreement as a key objective in Taiwan-U.S. relations that would provide incentives for Taiwanese businesses investing in the U.S., creating a win-win situation.