Bill Summary
The proposed legislation, titled the "No Tax Treaties for Foreign Aggressors Act of 2025," seeks to terminate the income tax treaty between the United States and the People's Republic of China if the People's Liberation Army (PLA) launches an armed attack against Taiwan. The act mandates that the Secretary of the Treasury must notify China of the U.S. intention to end the treaty within 30 days after the President confirms such an attack has occurred. Additionally, the President is required to inform several congressional committees about this termination. The rationale behind this legislation is to impose economic consequences on foreign nations that engage in military aggression, thereby reinforcing the U.S. commitment to Taiwan.
Possible Impacts
The "No Tax Treaties for Foreign Aggressors Act of 2025" could have various effects on individuals and businesses, particularly those with economic ties to China. Here are three examples:
1. **Increased Tax Burden on American Businesses**: If the income tax convention between the United States and China is terminated, American companies operating in China may face higher tax liabilities. The elimination of the treaty could lead to double taxation, where businesses are taxed by both the U.S. and China on the same income. This could negatively impact profitability and competitiveness, leading to potential layoffs or reduced investment in expansion.
2. **Impacts on Individuals with Cross-Border Income**: U.S. citizens or residents with income from China, such as expatriates working in China or individuals receiving investment income, could experience an increase in their overall tax burden. The lack of a tax treaty may result in higher taxes owed and more complex tax reporting requirements, leading to financial strain for those reliant on income from China.
3. **Geopolitical Tensions Affecting Trade and Investment**: The termination of the tax convention in response to military aggression could escalate tensions between the U.S. and China, impacting international trade relationships. Individuals and businesses engaged in trade with China may face uncertainty, leading to decreased investments and potential job losses in industries reliant on trade with China. This could also create an environment of economic instability, affecting markets and consumer confidence.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4848 Introduced in House (IH)]
<DOC>
119th CONGRESS
1st Session
H. R. 4848
To terminate the United States-People's Republic of China Income Tax
Convention if the People's Liberation Army initiates an armed attack
against Taiwan.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
August 1, 2025
Mr. Tony Gonzales of Texas introduced the following bill; which was
referred to the Committee on Ways and Means
_______________________________________________________________________
A BILL
To terminate the United States-People's Republic of China Income Tax
Convention if the People's Liberation Army initiates an armed attack
against Taiwan.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``No Tax Treaties for Foreign
Aggressors Act of 2025''.
SEC. 2. CONDITIONAL TERMINATION OF THE UNITED STATES-PEOPLE'S REPUBLIC
OF CHINA INCOME TAX CONVENTION.
(a) In General.--The Secretary of the Treasury shall provide
written notice to the People's Republic of China through diplomatic
channels of the United States intent to terminate the United States-The
People's Republic of China Income Tax Convention, done at Beijing April
30, 1984, and entered into force January 1, 1987, as provided by
Article 28 of the Convention, not later than 30 days after the
President notifies the Secretary of the Treasury that the People's
Liberation Army has initiated an armed attack against the Republic of
China (commonly known as ``Taiwan'').
(b) Congressional Notification.--The President shall submit written
notification of a termination described in subsection (a) to--
(1) the Committee on Foreign Relations of the Senate;
(2) the Committee on Finance of the Senate;
(3) the Committee on Foreign Affairs of the House of
Representatives; and
(4) the Committee on Ways and Means of the House of
Representatives.
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