A high-ranking representative of Taiwan, in the United States Hsiao Bi-khim said that semiconductor companies from this Asian country are in no hurry to make decisions on increasing investment in the USA because of the double taxation system, which they characterize as unfair and appear without sufficient grounds.
Hsiao Bi-khim also appealed to Congress to adopt an agreement as soon as possible to solve the problem of restraining the business development of Taiwanese firms in the United States against the background of unfavorable tax policy. She is optimistic about the potential prospects for resolving the current situation. In her opinion, bipartisan support for Taiwan in Washington may contribute to the conclusion of a deal by the end of 2023.
Hsiao Bi-khim stated that agreements on the settlement of tax policy issues are one of her main priorities. She also noted that Taiwanese companies have expenses related to tax obligations, which are three times higher than the volume of a similar financial burden of competitors from other major trading partners of the United States.
While talking to the media, Hsiao Bi-khim said that firms from Taiwan showed her their phased development plans and said that they could not continue to implement business strategies due to the inability to convince shareholders of the prospects of efforts without solving the problem of excessive taxation. She noted that investors are asking to resolve the situation as soon as possible, and called this task an absolute priority.
Taiwan, a self-ruled island democracy, is one of the main sources of advanced semiconductors, which are used in many developments and devices, including both cars and smartphones. The United States has repeatedly called on local companies to increase their investment in the USA. Against the background of these calls, the problem of the absence of a tax agreement, which is a barrier to the implementation of investment projects, has always been mentioned.
In the context of these difficulties, the aggravating factor is the fact that Washington does not have official diplomatic relations with the Government in Taipei. However, this objective obstacle has not become a barrier to the implementation of the efforts of the administration of US President Joe Biden to expand economic ties with Taiwan, including through the conclusion of a trade agreement. Similar progress has not yet been achieved in the aspect of tax regulation of the interaction between the two countries.
The media reports that the legislators of the Senate Finance Committee intend to start working on a bill on the tax regime for Taiwanese companies in September. They made this promise before the August vacation. Also in July, legislative norms came into force that provide advantages to enterprises interested in cross-border investments.
Hsiao Bi-khim says that the issue should be resolved as soon as possible and states that a settlement by the end of this year is a reasonable expectation. She also stated that the Congress is committed to implementing relevant efforts and Taiwan appreciates this attitude. According to her, various committees tried to find the most effective way to solve the problem.
Hsiao Bi-khim says Taiwan and the United States are strengthening trade relations. Progress in the implementation of the US-Taiwan trade initiative of the 21st century, within the framework of which the first agreement on several issues, including customs administration, was concluded in May, is an important signal of trust addressed to the business community.
A high-ranking representative of Taiwan said that work is currently underway to plan ongoing discussions in order to work out the remaining issues of cooperation between the two states. Last month, a second round of negotiations on this occasion was held in Washington, during which proposals related to labor, the environment, and agriculture were considered.
The American side has not yet commented on the problem of taxation and has not outlined the prospects for resolving this issue.
As we have reported earlier, Foxconn Plans to Build Component Plants in India.