Chemical Businesses Urge Treasury to Retain US-China Tax Treaty

The Treasury Department should preserve the US’ tax treaty with China since it provides significant certainty for businesses and prevents double taxation, a major American chemical business group wrote.

Terminating the treaty would lead to US workers visiting their Chinese operations becoming subject to Chinese income tax, along with exposing businesses to double taxation, the American Chemistry Council wrote in a letter released Tuesday.

Robert B. Flagg, the group’s senior director of federal affairs, wrote that the treaty is essential for companies’ operations since it provides a definition of permanent establishment, thus limiting China’s ability to tax ...