How HR 33 changes current law

AI-generated reading aid from the bill's amendatory text — verify against the official bill.

The bill establishes special tax rules for certain residents of Taiwan regarding income sourced in the United States.

• Internal Revenue Code Section 894

  SEC. 894A. SPECIAL RULES FOR QUALIFIED RESIDENTS OF TAIWAN.

  A new section is added to provide specific taxation rules for qualified residents of Taiwan.

• Internal Revenue Code Section 871

  30 percent → the applicable percentage (as defined in section 894A(a)(1)(C))

  Changes the tax withholding rate for certain income from 30 percent to a variable applicable percentage for qualified residents of Taiwan.

• Internal Revenue Code Section 871

  a trade or business within the United States → a United States permanent establishment of a qualified resident of Taiwan

  Alters the definition of the business location for taxation purposes to favor permanent establishments for qualified residents of Taiwan.

• Internal Revenue Code Section 871

  10 percent

  Sets a new applicable percentage of 10 percent for certain incomes received by qualified residents of Taiwan.

• Internal Revenue Code Section 871

  15 percent (10 percent in the case of a dividend which meets the requirements of subparagraph (D) and is received by or paid to an entity taxed as a corporation in Taiwan)

  Establishes a higher tax rate of 15 percent for dividends to certain qualified residents of Taiwan, with a lower rate for dividends to corporations.

• Internal Revenue Code Section 871

  No tax shall be imposed under this chapter (and no amount shall be withheld under section 1441(a) or chapter 24) with respect to qualified wages paid to a qualified resident of Taiwan who is not a resident of the United States or is employed as a member of the regular component of a ship or aircraft operated in international traffic.

  Exempts qualified wages from tax for specified residents of Taiwan.

• Internal Revenue Code Section 871

  No tax shall be imposed under this chapter (and no amount shall be withheld under section 1441(a) or chapter 24) with respect to income derived by an entertainer or athlete who is a qualified resident of Taiwan from personal activities as such performed in the United States if the aggregate amount of gross receipts from such activities for the taxable year do not exceed $30,000.

  Exempts low income derived by entertainers or athletes from taxation, promoting tax relief for low-earning residents.

• Internal Revenue Code Section 897

  were engaged in a trade or business within the United States → carried on a trade or business within the United States through a United States permanent establishment

  Changes the criteria for taxation related to dispositions of U.S. real property for Taiwanese residents.

• Internal Revenue Code Section 884

  30 percent → 10 percent

  Reduces branch profits tax rate for qualified residents of Taiwan from 30 percent to 10 percent.