Bill Summary
The proposed legislation, titled the "No Tax Treaties for Foreign Aggressors Act," aims to terminate the United States-People's Republic of China Income Tax Convention in the event of an armed attack against Taiwan by the People's Liberation Army. The bill stipulates that the Secretary of the Treasury must notify China of the U.S. intent to end the tax treaty within 30 days of receiving notification from the President that such an attack has occurred. Additionally, the President is required to inform specific Senate committees about the termination of the treaty. The legislation reflects a response to perceived threats to Taiwan's sovereignty and seeks to impose consequences on China in the form of tax treaty termination.
Possible Impacts
The proposed legislation titled the "No Tax Treaties for Foreign Aggressors Act" could have various implications for individuals and businesses. Here are three examples of how this legislation could affect people:
1. **Impact on American Businesses Operating in China**: If the income tax convention between the U.S. and China is terminated, American companies operating in China may face higher tax liabilities. This could lead to increased operational costs for these businesses, impacting their profitability and possibly resulting in job losses or reduced wages for employees in the U.S. and abroad.
2. **Effects on U.S. Citizens Residing in China**: U.S. citizens living and working in China might experience a significant increase in their tax obligations if the income tax treaty is terminated. Without the treaty's provisions, they could be subject to double taxation—paying taxes both in China and in the U.S. This could discourage Americans from taking jobs in China, affecting their personal finances and career opportunities.
3. **Broader Economic Relations between the U.S. and China**: The termination of the tax convention could escalate tensions between the two countries, potentially leading to retaliatory actions from China. This could impact trade relations and economic stability, which, in turn, would affect consumers in both countries through increased prices on goods and services, reduced availability of products, and overall economic uncertainty. Such shifts could influence job security for workers in industries reliant on international trade.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2646 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 2646
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 SENATE OF THE UNITED STATES
August 1, 2025
Mr. Cornyn (for himself, Mr. Coons, Mr. Cassidy, and Ms. Cortez Masto)
introduced the following bill; which was read twice and referred to the
Committee on Foreign Relations
_______________________________________________________________________
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''.
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; and
(2) the Committee on Finance of the Senate.
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