Van Hollen, Tillis Lead Bipartisan Push on Tax Relief for Taiwan

Today, Senators Chris Van Hollen (D-Md.) and Thom Tillis (R-N.C.) led 27 of their Senate colleagues in sending a letter to Senate Majority Leader Chuck Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-KY) highlighting the importance of passing U.S.-Taiwan double taxation relief measures this year. 

“As you are aware, Taiwan is a significant economic partner to the United States and yet Taiwan is the only one of the United States’ top 10 trading partners without a formal double taxation agreement. Taiwan has also become an increasing source of foreign direct investment (FDI) in the U.S., with TSMC’s investment in Arizona being the largest greenfield FDI project in U.S. history. However, existing tax barriers—including the double taxation of income, interest, and dividends—add financial burdens for businesses from both nations, making it more expensive for them to expand in each other’s markets,” the senators wrote. 

“The 118th Congress has made significant strides in tackling this issue, with the Finance and Foreign Relations Committees working together with the House on Taiwan tax relief legislation. If enacted, this legislation would provide specific relief from double taxation on U.S.-Taiwan cross-border investments and authorize the President to negotiate a tax agreement with Taiwan. Earlier this year, the House passed Taiwan-related provisions as part of H.R. 7024, the Tax Relief for American Families and Workers Act of 2024 and the Senate Committee on Finance passed Taiwan tax relief legislation out of Committee unanimously,” the senators continued. 

“By passing the U.S.-Taiwan double taxation relief measures this year, we can make significant headway in eliminating tax disincentives on cross-border investments between the U.S. and Taiwan. We believe there is strong support for these measures with Taiwan in the Senate, just as there was in the House. We are eager to work with you to see Taiwan tax relief legislation enacted before the 118th Congress comes to a close. U.S. and Taiwanese investors should not have to wait until the next Congress for action,” the senators concluded.

In addition to Senators Tillis and Van Hollen, the letter was signed by Marsha Blackburn (R-Tenn.), Michael Bennet (D-Colo.), Chuck Grassley (R-Iowa), George Helmy (D-N.J.), Cindy Hyde-Smith (R-Miss.), Alex Padilla (D-Calif.), Jerry Moran (R-Kan.), Tim Kaine (D-Va.), Eric Schmitt (R-Mo.), Mazie Hirono (D-Hawaii), Dan Sullivan (R-Alaska), Mark Kelly (D-Ariz.), Ted Budd (R-N.C.), Gary Peters (D-Mich.), Bill Cassidy (R-La.), Jeff Merkley (D-Ore.), Pete Ricketts (R-Neb.), Tammy Duckworth (D-Ill.), Kyrsten Sinema (I-Ariz.), Chris Coons (D-Del.), Amy Klobuchar (D-Minn.), Raphael Warnock (D-Ga.), Patty Murray (D-Wash.), Jackie Rosen (D-Nev.), Catherine Cortez-Masto (D-Nev.), Jeanne Shaheen (D-N.H.), and Brian Schatz (D-Hawaii).

Text of the full letter is available here.

Dear Majority Leader Schumer and Minority Leader McConnell,

As you are aware, Taiwan is a significant economic partner to the United States and yet Taiwan is the only one of the United States' top 10 trading partners without a formal double taxation agreement. Taiwan has also become an increasing source of foreign direct investment (FDI) in the U.S., with TSMC's investment in Arizona being the largest greenfield FDI project in U.S. history. However, existing tax barriers—including the double taxation of income, interest, and dividends—add financial burdens for businesses from both nations, making it more expensive for them to expand in each other’s markets. Without relief from double taxation, these barriers could hamper further Taiwanese investments in key U.S. sectors, such as semiconductors. These investments are essential for reducing U.S. reliance on foreign technology imports and preventing supply chain disruptions that threaten national security and economic growth.

The 118th Congress has made significant strides in tackling this issue, with the Finance and Foreign Relations Committees working together with the House on Taiwan tax relief legislation. If enacted, this legislation would provide specific relief from double taxation on U.S.-Taiwan cross-border investments and authorize the President to negotiate a tax agreement with Taiwan. Earlier this year, the House passed Taiwan-related provisions as part of H.R. 7024, the Tax Relief for American Families and Workers Act of 2024 and the Senate Committee on Finance passed Taiwan tax relief legislation out of Committee unanimously.

By passing the U.S.-Taiwan double taxation relief measures this year, we can make significant headway in eliminating tax disincentives on cross-border investments between the U.S. and Taiwan. We believe there is strong support for these measures with Taiwan in the Senate, just as there was in the House. We are eager to work with you to see Taiwan tax relief legislation enacted before the 118th Congress comes to a close. U.S. and Taiwanese investors should not have to wait until the next Congress for action.

Sincerely,