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<\/a><\/p>\nBy Patricia Zengerle<\/p>\n
WASHINGTON (Reuters) – Democratic and Republican U.S. senators announced legislation on Thursday authorizing President Joe Biden’s administration to negotiate a tax agreement with Taiwan, seeking to foster investment as Washington works to shore up the island against a rising China.<\/p>\n
The senators, led by Senate Foreign Relations Committee Chairman Bob Menendez and ranking Republican Jim Risch, said a tax agreement, similar to a tax treaty, would make it easier for businesses in the United States and Taiwan to avoid double taxation while protecting against tax evasion.<\/p>\n
The United States does not have formal diplomatic relations with Taiwan, so the lack of a tax agreement means Taiwanese businesses and individuals are taxed on their income by both the U.S. and Taiwanese governments.<\/p>\n
China views democratically governed Taiwan as its own territory and has increased military, political and economic pressure to assert those claims. <\/p>\n
Taiwan is a major global supplier of the semiconductor chips essential to a wide range of consumer goods and military equipment.<\/p>\n
Earlier on Thursday, U.S. Director of National Intelligence Avril Haines said a Chinese invasion of Taiwan could potentially halt production by the world’s largest advanced semiconductor chip maker, wiping out up to $1 trillion per year from the global economy per year.<\/p>\n
\n(Reporting by Patricia Zengerle in Washington; Editing by Matthew Lewis)<\/p>\n
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