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.

This bill sets special U.S. tax rules for people and businesses who are tax residents of Taiwan, to reduce double taxation on money earned from U.S. sources. It lowers the U.S. tax taken out of interest, dividends, and royalties to 10%—and to 15% on most dividends, or 10% for some corporate owners that meet holding tests . Some items are excluded, like certain real estate investment trust (REIT) dividends and gains from U.S. real estate, which keep the usual rules.

It also gives relief for workers and performers. Pay from a non‑U.S. employer for work done in the U.S. isn’t taxed here if the cost isn’t charged to a U.S. place of business, and crew members on ships or planes in international traffic qualify. Entertainers and athletes don’t owe U.S. tax if their U.S. show income for the year is $30,000 or less. If a Taiwan person or company runs a business through a regular place of business in the U.S., they do pay U.S. income tax on the profit tied to that activity; for Taiwan companies, the branch‑profits tax is cut to 10%.

• Who is affected: People and companies treated as “qualified residents of Taiwan” (Taiwan tax residents who aren’t U.S. persons; companies must meet ownership or stock‑market tests), plus U.S. payers that withhold tax .
• What changes:
  • Lower withholding rates on U.S. interest, dividends, and royalties (generally 10%; most dividends 15%; some corporate dividends 10%) .
  • No U.S. tax on certain wages from non‑U.S. employers and for crew of international ships/planes; $30,000 annual threshold for entertainers and athletes .
  • U.S. tax still applies to profits from a U.S. place of business; branch‑profits tax reduced to 10%.
  • Anti‑abuse rules limit use of shell structures and countries of concern, and require real business activity in Taiwan for certain benefits.
• When: These benefits start only after the U.S. Treasury confirms Taiwan offers similar benefits to Americans; the President can arrange that, and the IRS will issue guidance on how to apply the rules.