S. 2646, the "No Tax Treaties for Foreign Aggressors Act," would automatically terminate the U.S.-China income tax treaty if China's military launches an armed attack on Taiwan. Under the bill, the Secretary of the Treasury would have 30 days after the President confirms such an attack to formally notify China through diplomatic channels of the treaty's termination. The measure affects U.S.-China tax relations and would eliminate the current tax treaty that has been in place since 1987, potentially increasing tax burdens on businesses and individuals with cross-border income between the two countries. The bill contains no direct funding requirements but would require the President to notify Congress—specifically the Senate Foreign Relations and Finance committees—of any termination. This legislation serves as a potential economic penalty mechanism tied to military aggression against Taiwan.
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