,i #aai? ,,congress #a/ ,session ,h4 ,r4 #cc ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,janu>y #c1 #bjbe,mr4 ,smi? ( ,miss\ri 7= himself & ,mr4 ,neal7 introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means1 & 9 addition to ! ,committee on ,rules1 = a p]iod to be subsequ5tly det]m9$ by ! ,speak]1 9 ea* case = consid]ation ( su* provisions z fall )9 ! jurisdiction ( ! committee conc]n$ ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to provide special rules = ! taxation ( c]ta9 resid5ts ( ,taiwan ) income f s\rces )9 ! ,unit$ ,/ates4 ,i ,unit$ ,/ates-,taiwan ,exp$it$ ,d\ble-,tax ,relief ,act #aja4 ,%ort title ,?is title may be cit$ z ! ,unit$ ,/ates-,taiwan ,exp$it$ ,d\ble-,tax ,relief ,act4 #ajb4 ,special rules = taxation ( c]ta9 resid5ts ( ,taiwan 7a7 ,9 g5]al ,subp>t ,d ( "p ,,ii ( sub*apt] ,n ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] section #hid ! foll[+ new section3 #hid;,a4 ,special rules = qualifi$ resid5ts ( ,taiwan 7a7 ,c]ta9 income f ,unit$ ,/ates s\rces 7#a7 ,int]e/1 divid5ds1 & royalties1 etc 7,a7 ,9 g5]al ,9 ! case ( int]e/ 7o!r ?an orig9al issue disc\nt71 divid5ds1 royalties1 am\nts describ$ 9 section #hga7;a77#a77;,c71 & ga9s describ$ 9 section #hga7;a77#a77;,d7 receiv$ by or paid to a qualifi$ resid5t ( ,taiwan-- 7i7 sections #hga7;a71 #hha7;a71 #adda7;a71 #adda7;c77#e71 & #addb7;a7 %all ea* be appli$ by sub/itut+ ! applicable p]c5tage 7z def9$ 9 section #hid;,a7a77#a77;,c77 = #cj p]c5t ea* place x appe>s1 & 7ii7 sections #hga7;a71 #hha7;a71 & #adda7;c77#a7 %all ea* be appli$ by sub/itut+ a ,unit$ ,/ates p]man5t e/abli%m5t ( a qualifi$ resid5t ( ,taiwan = a trade or bus9ess )9 ! ,unit$ ,/ates ea* place x appe>s4 7,b7 ,exceptions 7i7 ,9 g5]al ,subp>agraph 7,a7 %all n apply to-- 7,i7 any divid5d receiv$ f or paid by a real e/ate inve/m5t tru/ :i* is n a qualifi$ ,,reit divid5d1 7,,ii7 any am\nt subject to section #hig1 7,,iii7 any am\nt receiv$ f or paid by an expatriat$ entity 7z def9$ 9 section #ghgd7;a77#b77 to a =eign relat$ p]son 7z def9$ 9 section #ghgd7;d77#c771 & 7,,iv7 any am\nt :i* is includ$ 9 income "u section #hfj;,c to ! ext5t t su* am\nt does n exce$ an excess inclusion ) respect to a ,,remic4 7ii7 ,qualifi$ ,,reit divid5d ,= purposes ( clause 7i77,i71 ! t]m qualifi$ ,,reit divid5d means any divid5d receiv$ f or paid by a real e/ate inve/m5t tru/ if su* divid5d is paid ) respect to a class ( %>es t is publicly trad$ & ! recipi5t ( ! divid5d is a p]son :o holds an int]e/ 9 any class ( %>es ( ! real e/ate inve/m5t tru/ ( n m ?an #e p]c5t4 7,c7 ,applicable p]c5tage ,= purposes ( apply+ subp>agraph 7,a77i7-- 7i7 ,9 g5]al ,except z provid$ 9 clause 7ii71 ! t]m applicable p]c5tage means #aj p]c5t4 7ii7 ,special rules = divid5ds ,9 ! case ( any divid5d 9 respect ( /ock receiv$ by or paid to a qualifi$ resid5t ( ,taiwan1 ! applicable p]c5tage %all be #ae p]c5t 7#aj p]c5t 9 ! case ( a divid5d :i* meets ! requirem5ts ( subp>agraph 7,d7 & is receiv$ by or paid to an entity tax$ z a corporation 9 ,taiwan74 7,d7 ,requirem5ts = l[] divid5d rate 7i7 ,9 g5]al ,! requirem5ts ( ?is subp>agraph are met ) respect to any divid5d 9 respect ( /ock 9 a corporation if1 at all times dur+ ! #ab-mon? p]iod end+ on ! date su* /ock becomes ex-divid5d ) respect to su* divid5d-- 7,i7 ! divid5d is d]iv$ by a qualifi$ resid5t ( ,taiwan1 & 7,,ii7 su* qualifi$ resid5t ( ,taiwan has held directly at lea/ #aj p]c5t 7by vote & value7 ( ! total out/&+ %>es ( /ock 9 su* corporation4 ,= purposes ( subclause 7,,ii71 a p]son %all be treat$ z directly hold+ a %>e ( /ock dur+ any p]iod describ$ 9 ! prec$+ s5t5ce if ! %>e 0 held by a corporation f :i* su* p]son lat] acquir$ t %>e & su* corporation 01 at ! "t ! %>e 0 acquir$1 bo? a connect$ p]son to su* p]son & a qualifi$ resid5t ( ,taiwan4 7ii7 ,exception = ,r,i,cs & ,r,e,i,ts ,not)/&+ clause 7i71 ! requirem5ts ( ?is subp>agraph %all n be treat$ z met ) respect to any divid5d paid by a regulat$ inve/m5t company or a real e/ate inve/m5t tru/4 7#b7 ,qualifi$ wages 7,a7 ,9 g5]al ,no tax %all be impos$ "u ?is *apt] 7& no am\nt %all be )held "u section #adda7;a7 or *apt] #bd7 ) respect to qualifi$ wages paid to a qualifi$ resid5t ( ,taiwan :o-- 7i7 is n a resid5t ( ! ,unit$ ,/ates 7det]m9$ )\t reg>d to subsection 7c77#c77;,e771 or 7ii7 is employ$ z a memb] ( ! regul> compon5t ( a %ip or aircraft op]at$ 9 int]national traffic4 7,b7 ,qualifi$ wages 7i7 ,9 g5]al ,! t]m qualifi$ wages means wages1 sal>ies1 or simil> remun]ations ) respect to employm5t involv+ ! p]=mance ( p]sonal s]vices )9 ! ,unit$ ,/ates :i*-- 7,i7 are paid by 7or on behalf (7 any employ] o!r ?an a ,unit$ ,/ates p]son1 & 7,,ii7 are n borne by a ,unit$ ,/ates p]man5t e/abli%m5t ( any p]son o!r ?an a ,unit$ ,/ates p]son4 7ii7 ,exceptions ,su* t]m %all n include directors' fees1 income d]iv$ z an ent]ta9] or a?lete1 income d]iv$ z a /ud5t or tra9ee1 p5sions1 am\nts paid ) respect to employm5t ) ! ,unit$ ,/ates1 any ,/ate 7or political subdivision !re(71 or any possession ( ! ,unit$ ,/ates 7or any political subdivision !re(71 or o!r am\nts specifi$ 9 regulations or guidance "u subsection 7f77#a77;,f74 7#c7 ,income d]iv$ f ent]ta9m5t or a?letic activities 7,a7 ,9 g5]al ,no tax %all be impos$ "u ?is *apt] 7& no am\nt %all be )held "u section #adda7;a7 or *apt] #bd7 ) respect to income d]iv$ by an ent]ta9] or a?lete :o is a qualifi$ resid5t ( ,taiwan f p]sonal activities z su* p]=m$ 9 ! ,unit$ ,/ates if ! aggregate am\nt ( gross receipts f su* activities = ! taxable ye> d n exce$ #cj1jjj4 7,b7 ,exception ,subp>agraph 7,a7 %all n apply ) respect to-- 7i7 income :i* is qualifi$ wages 7z def9$ 9 p>agraph 7#b77;,b71 det]m9$ )\t reg>d to clause 7ii7 !re(71 or 7ii7 income :i* is effectively connect$ ) a ,unit$ ,/ates p]man5t e/abli%m5t4 7b7 ,income connect$ ) a ,unit$ ,/ates p]man5t e/abli%m5t ( a qualifi$ resid5t ( ,taiwan 7#a7 ,9 g5]al 7,a7 ,9 g5]al ,9 lieu ( apply+ sections #hga7;b7 & #hhb1 a qualifi$ resid5t ( ,taiwan t c>ries on a trade or bus9ess )9 ! ,unit$ ,/ates ?r\gh a ,unit$ ,/ates p]man5t e/abli%m5t %all be taxable z provid$ 9 section #a1 #aa1 #ee1 or #ei;,a1 on its taxable income :i* is effectively connect$ ) su* p]man5t e/abli%m5t4 7,b7 ,det]m9ation ( taxable income ,9 det]m9+ taxable income = purposes ( p>agraph 7#a71 gross income includes only gross income :i* is effectively connect$ ) ! p]man5t e/abli%m5t4 7#b7 ,treatm5t ( dispositions ( ,unit$ ,/ates real prop]ty ,9 ! case ( a qualifi$ resid5t ( ,taiwan1 section #hig7;a7 %all be appli$-- 7,a7 by sub/itut+ c>ri$ on a trade or bus9ess )9 ! ,unit$ ,/ates ?r\gh a ,unit$ ,/ates p]man5t e/abli%m5t = 7 engag$ 9 a trade or bus9ess )9 ! ,unit$ ,/ates1 & 7,b7 by sub/itut+ su* ,unit$ ,/ates p]man5t e/abli%m5t = su* trade or bus9ess4 7#c7 ,treatm5t ( bran* pr(its taxes ,9 ! case ( any corporation :i* is a qualifi$ resid5t ( ,taiwan1 section #hhd %all be appli$-- 7,a7 by sub/itut+ #aj p]c5t = #cj p]c5t 9 subsection 7a7 !re(1 & 7,b7 by sub/itut+ a ,unit$ ,/ates p]man5t e/abli%m5t ( a qualifi$ resid5t ( ,taiwan = ! conduct ( a trade or bus9ess )9 ! ,unit$ ,/ates 9 subsection 7d77#a7 !re(4 7#d7 ,special rule ) respect to income d]iv$ f c]ta9 ent]ta9m5t or a?letic activities 7,a7 ,9 g5]al ,p>agraph 7#a7 %all n apply to ! ext5t t ! income is d]iv$-- 7i7 9 respect ( ent]ta9m5t or a?letic activities p]=m$ 9 ! ,unit$ ,/ates1 & 7ii7 by a qualifi$ resid5t ( ,taiwan :o is n ! ent]ta9] or a?lete p]=m+ su* activities4 7,b7 ,exception ,subp>agraph 7,a7 %all n apply if ! p]son describ$ 9 subp>agraph 7,a77ii7 is contractually au?oriz$ to designate ! individual :o is to p]=m su* activities4 7#e7 ,special rule ) respect to c]ta9 am\nts ,p>agraph 7#a7 %all n apply to any income :i* is wages1 sal>ies1 or simil> remun]ation ) respect to employm5t or ) respect to any am\nt :i* is describ$ 9 subsection 7a77#b77;,b77ii74 7c7 ,qualifi$ resid5t ( ,taiwan ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m qualifi$ resid5t ( ,taiwan means any p]son :o-- 7,a7 is liable to tax "u ! laws ( ,taiwan by reason ( su* p]son's domicile1 resid5ce1 place ( managem5t1 place ( incorporation1 or any simil> crit]ion1 7,b7 is n a ,unit$ ,/ates p]son 7det]m9$ )\t reg>d to p>agraph 7#c77;,e771 & 7,c7 9 ! case ( an entity tax$ z a corporation 9 ,taiwan1 meets ! requirem5ts ( p>agraph 7#b74 7#b7 ,limitation on b5efits = corporate entities ( ,taiwan 7,a7 ,9 g5]al ,subject to subp>agraphs 7,e7 & 7,f71 an entity meets ! requirem5ts ( ?is p>agraph only if x-- 7i7 meets ! own]%ip & income requirem5ts ( subp>agraph 7,b71 7ii7 meets ! publicly trad$ requirem5ts ( subp>agraph 7,c71 or 7iii7 meets ! qualifi$ subsidi>y requirem5ts ( subp>agraph 7,d74 7,b7 ,own]%ip & income requirem5ts ,! requirem5ts ( ?is subp>agraph are met = an entity if-- 7i7 at lea/ #ej p]c5t 7by vote & value7 ( ! total out/&+ %>es ( /ock 9 su* entity are own$ directly or indirectly by qualifi$ resid5ts ( ,taiwan1 & 7ii7 less ?an #ej p]c5t ( su* entity's gross income 7& 9 ! case ( an entity t is a memb] ( a te/$ gr\p1 less ?an #ej p]c5t ( ! te/$ gr\p's gross income7 is paid or accru$1 directly or indirectly1 9 ! =m ( paym5ts t are d$uctible = purposes ( ! income taxes impos$ by ,taiwan1 to p]sons :o are n-- 7,i7 qualifi$ resid5ts ( ,taiwan1 or 7,,ii7 ,unit$ ,/ates p]sons :o meet su* requirem5ts ) respect to ! ,unit$ ,/ates z det]m9$ by ! ,secret>y to be equival5t to ! requirem5ts ( ?is subsection 7det]m9$ )\t reg>d to p>agraph 7#a77;,b77 ) respect to resid5ts ( ,taiwan4 7,c7 ,publicly trad$ requirem5ts ,an entity meets ! requirem5ts ( ?is subp>agraph if-- 7i7 ! pr9cipal class ( its %>es 7& any disproportionate class ( %>es7 ( su* entity are prim>ily & regul>ly trad$ on an e/abli%$ securities m>ket 9 ,taiwan1 or 7ii7 ! prim>y place ( managem5t & control ( ! entity is 9 ,taiwan & all classes ( its out/&+ %>es describ$ 9 clause 7i7 are regul>ly trad$ on an e/abli%$ securities m>ket 9 ,taiwan4 7,d7 ,qualifi$ subsidi>y requirem5ts ,an entity meets ! requirem5t ( ?is subp>agraph if-- 7i7 at lea/ #ej p]c5t 7by vote & value7 ( ! total out/&+ %>es ( ! /ock ( su* entity are own$ directly or indirectly by #e or few] entities-- 7,i7 :i* meet ! requirem5ts ( subp>agraph 7,c71 or 7,,ii7 :i* are ,unit$ ,/ates p]sons ! pr9cipal class ( ! %>es 7& any disproportionate class ( %>es7 ( :i* are prim>ily & regul>ly trad$ on an e/abli%$ securities m>ket 9 ! ,unit$ ,/ates1 & 7ii7 ! entity meets ! requirem5ts ( clause 7ii7 ( subp>agraph 7,b74 7,e7 ,only indirect own]%ip ?r\gh qualify+ int]m$i>ies c\nt$ 7i7 ,9 g5]al ,/ock 9 an entity own$ by a p]son indirectly ?r\gh #a or m o!r p]sons %all n be treat$ z own$ by su* p]son 9 det]m9+ :e!r ! p]son meets ! requirem5ts ( subp>agraph 7,b77i7 or 7,d77i7 unless all su* o!r p]sons are qualify+ int]m$iate own]s4 7ii7 ,qualify+ int]m$iate own]s ,! t]m qualify+ int]m$iate own] means a p]son t is-- 7,i7 a qualifi$ resid5t ( ,taiwan1 or 7,,ii7 a resid5t ( any o!r =eign c\ntry 7o!r ?an a =eign c\ntry t is a =eign c\ntry ( conc]n7 t has 9 effect a compreh5sive conv5tion ) ! ,unit$ ,/ates = ! avoidance ( d\ble taxation4 7iii7 ,special rule = qualifi$ subsidi>ies ,= purposes ( apply+ subp>agraph 7,d77i71 ! t]m qualify+ int]m$iate own] %all include any p]son :o is a ,unit$ ,/ates p]son :o meets su* requirem5ts ) respect to ! ,unit$ ,/ates z det]m9$ by ! ,secret>y to be equival5t to ! requirem5ts ( ?is subsection 7det]m9$ )\t reg>d to p>agraph 7#a77;,b77 ) respect to resid5ts ( ,taiwan4 7,f7 ,c]ta9 paym5ts n includ$ ,9 det]m9+ :e!r ! requirem5ts ( subp>agraph 7,b77ii7 or 7,d77ii7 are met ) respect to an entity1 ! foll[+ paym5ts %all n be tak5 into acc\nt3 7i7 ,arm's-l5g? paym5ts by ! entity 9 ! ord9>y c\rse ( bus9ess = s]vices or tangible prop]ty4 7ii7 ,9 ! case ( a te/$ gr\p1 intra-gr\p transactions4 7#c7 ,dual resid5ts 7,a7 ,rules = det]m9ation ( /atus 7i7 ,9 g5]al ,an individual :o is an applicable dual resid5t & :o is describ$ 9 subp>agraph 7,b71 7,c71 or 7,d7 %all be treat$ z a qualifi$ resid5t ( ,taiwan4 7ii7 ,applicable dual resid5t ,= purposes ( ?is p>agraph1 ! t]m applicable dual resid5t means an individual :o-- 7,i7 is n a ,unit$ ,/ates citiz51 7,,ii7 is a resid5t ( ! ,unit$ ,/ates 7det]m9$ )\t reg>d to subp>agraph 7,e771 & 7,,iii7 w\ld be a qualifi$ resid5t ( ,taiwan b = p>agraph 7#a77;,b74 7,b7 ,p]man5t home ,an individual is describ$ 9 ?is subp>agraph if su* individual-- 7i7 has a p]man5t home available to su* individual 9 ,taiwan1 & 7ii7 does n h a p]man5t home available to su* individual 9 ! ,unit$ ,/ates4 7,c7 ,c5t] ( vital int]e/s ,an individual is describ$ 9 ?is subp>agraph if-- 7i7 su* individual has a p]man5t home available to su* individual 9 bo? ,taiwan & ! ,unit$ ,/ates1 & 7ii7 su* individual's p]sonal & economic relations 7c5t] ( vital int]e/s7 are clos] to ,taiwan ?an to ! ,unit$ ,/ates4 7,d7 ,habitual abode ,an individual is describ$ 9 ?is subp>agraph if-- 7i7 su* individual-- 7,i7 does n h a p]man5t home available to su* individual 9 ei!r ,taiwan or ! ,unit$ ,/ates1 or 7,,ii7 has a p]man5t home available to su* individual 9 bo? ,taiwan & ! ,unit$ ,/ates b su* individual's c5t] ( vital int]e/s "u subp>agraph 7,c77ii7 _c be det]m9$1 & 7ii7 su* individual has a habitual abode 9 ,taiwan & n ! ,unit$ ,/ates4 7,e7 ,unit$ ,/ates tax treatm5t ( qualifi$ resid5t ( ,taiwan ,not)/&+ section #ggja1 an individual :o is treat$ z a qualifi$ resid5t ( ,taiwan by reason ( ?is p>agraph = all or any portion ( a taxable ye> %all n be treat$ z a resid5t ( ! ,unit$ ,/ates = purposes ( comput+ su* individual's ,unit$ ,/ates income tax liability = su* taxable ye> or portion !re(4 7#d7 ,rules ( special application 7,a7 ,divid5ds ,= purposes ( apply+ ?is section to any divid5d1 p>agraph 7#b77;,d7 %all be appli$ )\t reg>d to clause 7ii7 !re(4 7,b7 ,items ( income emanat+ f an active trade or bus9ess 9 ,taiwan ,= purposes ( ?is section-- 7i7 ,9 g5]al ,not)/&+ ! prec$+ p>agraphs ( ?is subsection1 if an entity tax$ z a corporation 9 ,taiwan is n a qualifi$ resid5t ( ,taiwan b meets ! requirem5ts ( subp>agraphs 7,a7 & 7,b7 ( p>agraph 7#a71 any qualifi$ item ( income su* entity d]iv$ f ! ,unit$ ,/ates %all be treat$ z income ( a qualifi$ resid5t ( ,taiwan4 7ii7 ,qualifi$ items ( income 7,i7 ,9 g5]al ,! t]m qualifi$ item ( income means any item ( income :i* emanates f1 or is incid5tal to1 ! conduct ( an active trade or bus9ess 9 ,taiwan 7o!r ?an op]at+ z a hold+ company1 provid+ ov]all sup]vision or adm9i/ration ( a gr\p ( companies1 provid+ gr\p f9anc+1 or mak+ or manag+ inve/m5ts 7unless su* mak+ or manag+ inve/m5ts is c>ri$ on by a bank1 insurance company1 or regi/]$ securities deal] 9 ! ord9>y c\rse ( its bus9ess z su*774 7,,ii7 ,sub/antial activity requirem5t ,an item ( income :i* is d]iv$ f a trade or bus9ess conduct$ 9 ! ,unit$ ,/ates or f a connect$ p]son %all be a qualifi$ item ( income only if ! trade or bus9ess activity conduct$ 9 ,taiwan to :i* ! item is relat$ is sub/antial 9 relation to ! same or a complem5t>y trade or bus9ess activity c>ri$ on 9 ! ,unit$ ,/ates4 ,= purposes ( apply+ ?is subclause1 activities conduct$ by p]sons t are connect$ to ! entity describ$ 9 clause 7i7 %all be deem$ to be conduct$ by su* entity4 7iii7 ,exception ,?is subp>agraph %all n apply to any item ( income d]iv$ by an entity if at lea/ #ej p]c5t 7by vote or value7 ( su* entity is own$ 7directly or indirectly7 or controll$ by resid5ts ( a =eign c\ntry ( conc]n4 7d7 ,o!r def9itions & special rules ,= purposes ( ?is section-- 7#a7 ,unit$ ,/ates p]man5t e/abli%m5t 7,a7 ,9 g5]al ,! t]m ,unit$ ,/ates p]man5t e/abli%m5t means1 ) respect to a qualifi$ resid5t ( ,taiwan1 a p]man5t e/abli%m5t ( su* resid5t :i* is )9 ! ,unit$ ,/ates4 7,b7 ,special rule ,! det]m9ation ( :e!r !re is a p]man5t e/abli%m5t ( a qualifi$ resid5t ( ,taiwan )9 ! ,unit$ ,/ates %all be made )\t reg>d to :e!r an entity :i* is tax$ z a corporation 9 ,taiwan & :i* is a qualifi$ resid5t ( ,taiwan controls or is controll$ by-- 7i7 a dome/ic corporation1 or 7ii7 any o!r p]son t c>ries on bus9ess 9 ! ,unit$ ,/ates 7:e!r ?r\gh a p]man5t e/abli%m5t or o!rwise74 7#b7 ,p]man5t e/abli%m5t 7,a7 ,9 g5]al ,! t]m p]man5t e/abli%m5t means a fix$ place ( bus9ess ?r\gh :i* a trade or bus9ess is :olly or p>tly c>ri$ on4 ,su* t]m %all include-- 7i7 a place ( managem5t1 7ii7 a bran*1 7iii7 an (fice1 7iv7 a factory1 7v7 a work%op1 & 7vi7 a m9e1 an oil or gas well1 a qu>ry1 or any o!r place ( extraction ( natural res\rces4 7,b7 ,special rules = c]ta9 tempor>y projects 7i7 ,9 g5]al ,a build+ site or con/ruction or in/allation project1 or an in/allation or drill+ rig or %ip us$ = ! exploration or exploitation ( ! sea b$ & its subsoil & _! natural res\rces1 con/itutes a p]man5t e/abli%m5t only if x la/s1 or ! activities ( ! rig or %ip la/s1 = m ?an #ab mon?s4 7ii7 ,det]m9ation ( #ab-mon? p]iod ,= purposes ( clause 7i71 ! p]iod ov] :i* a build+ site or con/ruction or in/allation project ( a p]son la/s %all include any p]iod ( m ?an #cj days dur+ :i* su* p]son does n c>ry on activities at su* build+ site or con/ruction or in/allation project b connect$ activities are c>ri$ on at su* build+ site or con/ruction or in/allation project by "o or m connect$ p]sons4 7,c7 ,habitual ex]cise ( contract au?ority treat$ z p]man5t e/abli%m5t ,not)/&+ subp>agraphs 7,a7 & 7,b71 :]e a p]son 7o!r ?an an ag5t ( an indep5d5t /atus to :om subp>agraph 7,d77ii7 applies7 is act+ on behalf ( a trade or bus9ess ( a qualifi$ resid5t ( ,taiwan & has & habitually ex]cises an au?ority to conclude contracts t are b9d+ on ! trade or bus9ess1 t trade or bus9ess %all be deem$ to h a p]man5t e/abli%m5t 9 ! c\ntry 9 :i* su* au?ority is ex]cis$ 9 respect ( any activities t ! p]son und]takes = ! trade or bus9ess1 unless ! activities ( su* p]son are limit$ to ^? describ$ 9 subp>agraph 7,d77i7 t1 if ex]cis$ ?r\gh a fix$ place ( bus9ess1 w\ld n make ?is fix$ place ( bus9ess a p]man5t e/abli%m5t "u ! provisions ( t subp>agraph4 7,d7 ,exclusions 7i7 ,9 g5]al ,not)/&+ subp>agraphs 7,a7 & 7,b71 ! t]m p]man5t e/abli%m5t %all n include-- 7,i7 ! use ( facilities solely = ! purpose ( /orage1 display1 or deliv]y ( goods or m]*&ise belong+ to ! trade or bus9ess1 7,,ii7 ! ma9t5ance ( a /ock ( goods or m]*&ise belong+ to ! trade or bus9ess solely = ! purpose ( /orage1 display1 or deliv]y1 7,,iii7 ! ma9t5ance ( a /ock ( goods or m]*&ise belong+ to ! trade or bus9ess solely = ! purpose ( process+ by ano!r trade or bus9ess1 7,,iv7 ! ma9t5ance ( a fix$ place ( bus9ess solely = ! purpose ( pur*as+ goods or m]*&ise1 or ( collect+ in=mation1 = ! trade or bus9ess1 7,v7 ! ma9t5ance ( a fix$ place ( bus9ess solely = ! purpose ( c>ry+ on1 = ! trade or bus9ess1 any o!r activity ( a prep>atory or auxili>y "*1 or 7,,vi7 ! ma9t5ance ( a fix$ place ( bus9ess solely = any comb9ation ( ! activities m5tion$ 9 subclauses 7,i7 ?r\gh 7,v71 provid$ t ! ov]all activity ( ! fix$ place ( bus9ess result+ f ?is comb9ation is ( a prep>atory or auxili>y "*4 7ii7 ,brok]s & o!r indep5d5t ag5ts ,a trade or bus9ess %all n be consid]$ to h a p]man5t e/abli%m5t 9 a c\ntry m]ely because x c>ries on bus9ess 9 su* c\ntry ?r\gh a brok]1 g5]al commission ag5t1 or any o!r ag5t ( an indep5d5t /atus1 provid$ t su* p]sons are act+ 9 ! ord9>y c\rse ( _! bus9ess z indep5d5t ag5ts4 7#c7 ,te/$ gr\p ,! t]m te/$ gr\p includes1 ) respect to any entity tax$ z a corporation 9 ,taiwan1 su* entity & any o!r entity tax$ z a corporation 9 ,taiwan t-- 7,a7 p>ticipates z a memb] ) su* entity 9 a tax consolidation1 fiscal unity1 or simil> regime t requires memb]s ( ! gr\p to %>e pr(its or losses1 or 7,b7 %>es losses ) su* entity pursuant to a gr\p relief or o!r loss %>+ regime4 7#d7 ,connect$ p]son ,two p]sons %all be connect$ p]sons if "o owns1 directly or indirectly1 at lea/ #ej p]c5t ( ! int]e/s 9 ! o!r 7or1 9 ! case ( a corporation1 at lea/ #ej p]c5t ( ! aggregate vote & value ( ! corporation's %>es7 or ano!r p]son owns1 directly or indirectly1 at lea/ #ej p]c5t ( ! int]e/s 7or1 9 ! case ( a corporation1 at lea/ #ej p]c5t ( ! aggregate vote & value ( ! corporation's %>es7 9 ea* p]son4 ,9 any case1 a p]son %all be connect$ to ano!r if1 bas$ on all ! relevant facts & circum/ances1 "o has control ( ! o!r or bo? are "u ! control ( ! same p]son or p]sons4 7#e7 ,=eign c\ntry ( conc]n ,! t]m =eign c\ntry ( conc]n has ! mean+ giv5 su* t]m "u p>agraph 7#g7 ( section #iija ( ! ,william ,m4 7,mac7 ,?ornb]ry ,national ,def5se ,au?orization ,act = ,fiscal ,ye> #bjba 7#ae ,u4,s4,c4 #dfea7g771 z add$ by section #ajc7;a77#d7 ( ! ,,*ips ,act ( #bjbb74 7#f7 ,p>tn]%ips2 b5efici>ies ( e/ates & tru/s ,= purposes ( ?is section-- 7,a7 a qualifi$ resid5t ( ,taiwan :i* is a p>tn] ( a p>tn]%ip :i* c>ries on a trade or bus9ess )9 ! ,unit$ ,/ates ?r\gh a ,unit$ ,/ates p]man5t e/abli%m5t %all be treat$ z c>ry+ on su* trade or bus9ess ?r\gh su* p]man5t e/abli%m5t1 & 7,b7 a qualifi$ resid5t ( ,taiwan :i* is a b5efici>y ( an e/ate or tru/ :i* c>ries on a trade or bus9ess )9 ! ,unit$ ,/ates ?r\gh a ,unit$ ,/ates p]man5t e/abli%m5t %all be treat$ z c>ry+ on su* trade or bus9ess ?r\gh su* p]man5t e/abli%m5t4 7#g7 ,d5ial ( b5efits = c]ta9 paym5ts ?r\gh hybrid entities ,= purposes ( ?is section1 rules simil> to ! rules ( section #hid7;c7 %all apply4 7e7 ,application 7#a7 ,9 g5]al ,?is section %all n apply to any p]iod unless ! ,secret>y has det]m9$ t ,taiwan has provid$ b5efits to ,unit$ ,/ates p]sons = su* p]iod t are reciprocal to ! b5efits provid$ to qualifi$ resid5ts ( ,taiwan "u ?is section4 7#b7 ,provision ( reciprocity ,! ,presid5t or 8 designee is au?oriz$ to ex*ange lett]s1 ent] into an agreem5t1 or take o!r necess>y & appropriate /eps relative to ,taiwan = ! reciprocal provision ( ! b5efits describ$ 9 ?is section4 7f7 ,regulations or o!r guidance 7#a7 ,9 g5]al ,! ,secret>y %all issue su* regulations or o!r guidance z may be necess>y or appropriate to c>ry out ! provisions ( ?is section1 includ+ su* regulations or guidance =-- 7,a7 det]m9+-- 7i7 :at con/itutes a ,unit$ ,/ates p]man5t e/abli%m5t ( a qualifi$ resid5t ( ,taiwan1 & 7ii7 income t is effectively connect$ ) su* a p]man5t e/abli%m5t1 7,b7 prev5t+ ! abuse ( ! provisions ( ?is section by p]sons :o are n 7or :o %\ld n be treat$ z7 qualifi$ resid5ts ( ,taiwan1 7,c7 requirem5ts = record keep+ & report+1 7,d7 rules to assi/ )hold+ ag5ts or employ]s 9 det]m9+ :e!r a =eign p]son is a qualifi$ resid5t ( ,taiwan = purposes ( det]m9+ :e!r )hold+ or report+ is requir$ = a paym5t 7&1 if )hold+ is requir$1 :e!r x %\ld be appli$ at a r$uc$ rate71 7,e7 ! application ( subsection 7a77#a77;,d77i7 to /ock held by pr$ecessor own]s1 7,f7 det]m9+ :at am\nts are to be treat$ z qualifi$ wages = purposes ( subsection 7a77#b71 7,g7 det]m9+ ! am\nts to :i* subsection 7a77#c7 applies1 7,h7 def9+ e/abli%$ securities m>ket = purposes ( subsection 7c71 7,i7 ! application ( ! rules ( subsection 7c77#d77;,b71 7,j7 ! application ( subsection 7d77#f7 & section #addf1 7,k7 det]m9+ own]%ip int]e/s held by resid5ts ( a =eign c\ntry ( conc]n1 & 7,l7 det]m9+ ! />t+ & end+ dates = p]iods ) respect to ! application ( ?is section "u subsection 7e71 :i* may be sep>ate dates = taxes )held at ! s\rce & o!r taxes4 7#b7 ,regulations to be consi/5t ) model treaty ,any regulations or o!r guidance issu$ "u ?is section %all1 to ! ext5t practical1 be consi/5t ) ! provisions ( ! ,unit$ ,/ates model income tax conv5tion dat$ ,febru>y #g1 #bjaf4 4 7b7 ,con=m+ am5dm5t to )hold+ tax ,sub*apt] ,a ( *apt] #c ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new section3 #addg4 ,)hold+ = qualifi$ resid5ts ( ,taiwan ,= r$uc$ rates ( )hold+ = c]ta9 resid5ts ( ,taiwan1 see section #hid;,a4 4 7c7 ,cl]ical am5dm5ts 7#a7 ,! table ( sections = subp>t ,d ( "p ,,ii ( sub*apt] ,n ( *apt] #a ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by ins]t+ aft] ! item relat+ to section #hid ! foll[+ new item3 ,sec4 #hid;,a4 ,special rules = qualifi$ resid5ts ( ,taiwan4 4 7#b7 ,! table ( sections = sub*apt] ,a ( *apt] #c ( su* ,code is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #addg4 ,)hold+ = qualifi$ resid5ts ( ,taiwan4 4 ,,ii ,unit$ ,/ates-,taiwan ,tax ,agreem5t ,au?orization ,act #bja4 ,%ort title ,?is title may be cit$ z ! ,unit$ ,/ates-,taiwan ,tax ,agreem5t ,au?orization ,act4 #bjb4 ,def9itions ,9 ?is title3 7#a7 ,agreem5t ,! t]m ,agreem5t means ! tax agreem5t au?oriz$ by section #bjc7;a74 7#b7 ,appropriate congressional committees ,! t]m appropriate congressional committees means-- 7,a7 ! ,committee on ,=eign ,relations & ! ,committee on ,f9ance ( ! ,s5ate2 & 7,b7 ! ,committee on ,ways & ,means ( ! ,h\se ( ,repres5tatives4 7#c7 ,approval legislation ,! t]m approval legislation means legislation t approves ! ,agreem5t4 7#d7 ,implem5t+ legislation ,! t]m implem5t+ legislation means legislation t makes any *anges to ! ,int]nal ,rev5ue ,code ( #aihf necess>y to implem5t ! ,agreem5t4 #bjc4 ,au?orization to negotiate & ent] into agreem5t 7a7 ,9 g5]al ,subsequ5t to a det]m9ation "u section #hid;,a7e77#a7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by ! ,unit$ ,/ates-,taiwan ,exp$it$ ,d\ble-,tax ,relief ,act71 ! ,presid5t is au?oriz$ to negotiate & ent] into a tax agreem5t relative to ,taiwan4 7b7 ,elem5ts ( agreem5t 7#a7 ,con=mity ) bilat]al income tax conv5tions ,! ,presid5t %all ensure t-- 7,a7 any provisions includ$ 9 ! ,agreem5t con=m ) provisions cu/om>ily conta9$ 9 ,unit$ ,/ates bilat]al income tax conv5tions1 z exemplifi$ by ! #bjaf ,unit$ ,/ates ,model ,income ,tax ,conv5tion2 & 7,b7 ! ,agreem5t does n include elem5ts outside ! scope ( ! #bjaf ,unit$ ,/ates ,model ,income ,tax ,conv5tion4 7#b7 ,incorporation ( tax agreem5ts & laws ,not)/&+ p>agraph 7#a71 ! ,agreem5t may incorporate & re/ate provisions ( any agreem5t1 or exi/+ ,unit$ ,/ates law1 address+ d\ble taxation = resid5ts ( ! ,unit$ ,/ates & ,taiwan4 7#c7 ,au?ority ,! ,agreem5t %all include ! foll[+ /atem5t3 ,! ,agreem5t is ent]$ into pursuant to ! ,unit$ ,/ates-,taiwan ,tax ,agreem5t ,au?orization ,act4 7#d7 ,entry into =ce ,! ,agreem5t %all include a provision condition+ entry into =ce ^u-- 7,a7 enactm5t ( approval legislation & implem5t+ legislation pursuant to section #bjg2 & 7,b7 confirmation by ! ,secret>y ( ! ,treasury t ! relevant au?ority 9 ,taiwan has approv$ & tak5 appropriate /eps requir$ to implem5t ! ,agreem5t4 #bjd4 ,consultations ) ,congress 7a7 ,notification ^u comm5cem5t ( negotiations ,! ,presid5t %all provide writt5 notification to ! appropriate congressional committees ( ! comm5cem5t ( negotiations betwe5 ! ,unit$ ,/ates & ,taiwan on ! ,agreem5t at lea/ #ae cal5d> days be=e comm5c+ su* negotiations4 7b7 ,consultations dur+ negotiations 7#a7 ,brief+s ,n lat] ?an #ij days aft] comm5cem5t ( negotiations ) respect to ! ,agreem5t1 & e #ahj days !reaft] until ! ,presid5t ent]s into ! ,agreem5t1 ! ,presid5t %all provide a brief+ to ! appropriate congressional committees on ! /atus ( ! negotiations1 includ+ a description ( elem5ts "u negotiation4 7#b7 ,meet+s & o!r consultations 7,a7 ,9 g5]al ,9 ! c\rse ( negotiations ) respect to ! ,agreem5t1 ! ,secret>y ( ! ,treasury1 9 coord9ation ) ! ,secret>y ( ,/ate1 %all-- 7i7 meet1 ^u reque/1 ) ! *airman or rank+ memb] ( any ( ! appropriate congressional committees reg>d+ negotiat+ objectives & ! /atus ( negotiations 9 progress2 & 7ii7 consult closely & on a timely basis )1 & keep fully appris$ ( ! negotiations1 ! appropriate congressional committees4 7,b7 ,elem5ts ( consultations ,! consultations describ$ 9 subp>agraph 7,a7 %all include consultations ) respect to-- 7i7 ! nature ( ! contemplat$ ,agreem5t2 7ii7 h[ & to :at ext5t ! contemplat$ ,agreem5t is consi/5t ) ! elem5ts set =? 9 section #bjc7;b72 & 7iii7 ! implem5tation ( ! contemplat$ ,agreem5t1 includ+-- 7,i7 ! g5]al effect ( ! contemplat$ ,agreem5t on exi/+ laws2 7,,ii7 propos$ *anges to any exi/+ laws to implem5t ! contemplat$ ,agreem5t2 & 7,,iii7 propos$ adm9i/rative actions to implem5t ! contemplat$ ,agreem5t4 #bje4 ,approval & implem5tation ( agreem5t 7a7 ,9 g5]al ,! ,agreem5t may n ent] into =ce unless-- 7#a7 ! ,presid5t1 at lea/ #fj days be=e ! day on :i* ! ,presid5t ent]s into ! ,agreem5t1 publi%es ! text ( ! contemplat$ ,agreem5t on a publicly available website ( ! ,dep>tm5t ( ! ,treasury2 & 7#b7 !re is enact$ into law1 ) respect to ! ,agreem5t1 approval legislation & implem5t+ legislation pursuant to section #bjg4 7b7 ,entry into =ce ,! ,presid5t may provide = ! ,agreem5t to ent] into =ce ^u-- 7#a7 enactm5t ( approval legislation & implem5t+ legislation pursuant to section #bjg2 & 7#b7 confirmation by ! ,secret>y ( ! ,treasury t ! relevant au?ority 9 ,taiwan has approv$ & tak5 appropriate /eps requir$ to implem5t ! ,agreem5t4 #bjf4 ,submission to ,congress ( agreem5t & implem5tation policy 7a7 ,submission ( agreem5t ,n lat] ?an #bgj days aft] ! ,presid5t ent]s into ! ,agreem5t1 ! ,presid5t or ! ,presid5t's designee %all submit to ,congress-- 7#a7 ! f9al text ( ! ,agreem5t2 & 7#b7 a te*nical explanation ( ! ,agreem5t4 7b7 ,submission ( implem5tation policy ,n lat] ?an #bgj days aft] ! ,presid5t ent]s into ! ,agreem5t1 ! ,secret>y ( ! ,treasury %all submit to ,congress-- 7#a7 a description ( ^? *anges to exi/+ laws t ! ,presid5t consid]s w\ld be requir$ 9 ord] to ensure t ! ,unit$ ,/ates acts 9 a mann] consi/5t ) ! ,agreem5t2 & 7#b7 a /atem5t ( anticipat$ adm9i/rative action propos$ to implem5t ! ,agreem5t4 #bjg4 ,consid]ation ( approval legislation & implem5t+ legislation 7a7 ,9 g5]al ,! approval legislation ) respect to ! ,agreem5t %all include ! foll[+3 ,congress approves ! ,agreem5t submitt$ to ,congress pursuant to section #bjf ( ! ,unit$ ,/ates-,taiwan ,tax ,agreem5t ,au?orization ,act on 41 ) ! blank space be+ fill$ ) ! appropriate date4 7b7 ,approval legislation committee ref]ral ,! approval legislation %all-- 7#a7 9 ! ,s5ate1 be ref]r$ to ! ,committee on ,=eign ,relations2 & 7#b7 9 ! ,h\se ( ,repres5taives1 be ref]r$ to ! ,committee on ,ways & ,means4 7c7 ,implem5t+ legislation committee ref]ral ,! implem5t+ legislation %all-- 7#a7 9 ! ,s5ate1 be ref]r$ to ! ,committee on ,f9ance2 & 7#b7 9 ! ,h\se ( ,repres5tatives1 be ref]r$ to ! ,committee on ,ways & ,means4 #bjh4 ,relation%ip ( agreem5t to ,int]nal ,rev5ue ,code ( #aihf 7a7 ,int]nal ,rev5ue ,code ( #aihf to control ,no provision ( ! ,agreem5t or approval legislation1 nor ! application ( any su* provision to any p]son or circum/ance1 :i* is inconsi/5t ) any provision ( ! ,int]nal ,rev5ue ,code ( #aihf1 %all h effect4 7b7 ,con/ruction ,no?+ 9 ?is title %all be con/ru$-- 7#a7 to am5d or modify any law ( ! ,unit$ ,/ates2 or 7#b7 to limit any au?ority conf]r$ "u any law ( ! ,unit$ ,/ates1 unless specifically provid$ = 9 ?is title4 #bji4 ,au?orization ( subsequ5t tax agreem5ts relative to ,taiwan 7a7 ,9 g5]al ,subsequ5t to ! enactm5t ( approval legislation & implem5t+ legislation pursuant to section #bjg-- 7#a7 ! t]m 8tax agreem5t0 9 section #bjc7;a7 %all be treat$ z includ+ any tax agreem5t relative to ,taiwan :i* supplem5ts or sup]s$es ! ,agreem5t to :i* su* approval legislation & implem5t+ legislation relates1 & 7#b7 ! t]m 8,agreem5t0 %all be treat$ z includ+ su* tax agreem5t4 7b7 ,requirem5ts1 etc41 to apply sep>ately ,! provisions ( ?is title 7includ+ section #bjd7 %all be appli$ sep>ately ) respect to ea* tax agreem5t ref]r$ to 9 subsection 7a74 #baj4 ,unit$ ,/ates treatm5t ( d\ble taxation matt]s ) respect to ,taiwan 7a7 ,f9d+s ,congress makes ! foll[+ f9d+s3 7#a7 ,! ,unit$ ,/ates addresses issues ) respect to d\ble taxation ) =eign c\ntries by ent]+ into bilat]al income tax conv5tions 7kn[n z tax treaties7 ) su* c\ntries1 subject to ! advice & cons5t ( ! ,s5ate to ratification pursuant to article ,,ii ( ! ,con/itution4 7#b7 ,! ,unit$ ,/ates has ent]$ into m ?an sixty su* tax treaties1 :i* facilitate economic activity1 /r5g!n bilat]al coop]ation1 & b5efit ,unit$ ,/ates work]s1 bus9esses1 & o!r ,unit$ ,/ates taxpay]s4 7#c7 ,due to ,taiwan's unique /atus1 ! ,unit$ ,/ates is unable to ent] into an article ,,ii tax treaty ) ,taiwan1 necessitat+ an agreem5t to address issues ) respect to d\ble taxation4 7b7 ,/atem5t ( policy ,x is ! policy ( ! ,unit$ ,/ates to-- 7#a7 provide = additional bilat]al tax relief ) respect to ,taiwan1 beyond t provid$ = 9 section #hid;,a ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by ! ,unit$ ,/ates-,taiwan ,exp$it$ ,d\ble-,tax ,relief ,act71 only aft] entry into =ce ( an ,agreem5t1 z provid$ = 9 section #bje1 & only 9 a mann] consi/5t ) su* ,agreem5t2 & 7#b7 cont9ue to provide = bilat]al tax relief ) sov]eign /ates to address d\ble taxation & o!r relat$ matt]s ?r\gh ent]+ into bilat]al income tax conv5tions1 subject to ! ,s5ate's advice & cons5t to ratification pursuant to article ,,ii ( ! ,con/itution4