H.R. 4848: No Tax Treaties for Foreign Aggressors Act of 2025

This bill, known as the No Tax Treaties for Foreign Aggressors Act of 2025, aims to terminate the existing income tax agreement between the United States and the People's Republic of China. This termination would be triggered if the People's Liberation Army of China carries out an armed attack against Taiwan, officially referred to as the Republic of China.

Key Provisions of the Bill

• Notification of Termination: The Secretary of the Treasury is required to notify China, through diplomatic channels, of the U.S. intent to terminate the income tax convention. This notification would need to occur within 30 days following a presidential notice that such an armed attack has taken place.
• Congressional Notification: After this termination, the President must inform several congressional committees about the actions taken regarding the tax agreement. These committees include:
  • Committee on Foreign Relations of the Senate
  • Committee on Finance of the Senate
  • Committee on Foreign Affairs of the House of Representatives
  • Committee on Ways and Means of the House of Representatives

Background

The income tax convention currently in place was established to reduce the risk of double taxation for individuals and businesses operating in both countries, promoting economic cooperation. If this bill is enacted, it would remove the tax treaty benefits for U.S. citizens and companies engaged with Chinese entities, should hostilities arise.

Implications of the Bill

• The removal of this tax agreement could result in higher tax liabilities for U.S. businesses and individuals with ties to China, as they would potentially face double taxation on income earned in China.
• This action may influence diplomatic relations between the United States and China, particularly in the context of economic and military interactions.

Relevant Companies

• AAPL (Apple Inc.): Apple has significant business operations in China, and the termination of the tax treaty could result in increased tax obligations for its earnings in that country.
• NKE (Nike, Inc.): Nike produces a substantial portion of its products in China and could face similar tax impacts due to the increased tax burden on its operations there.
• TSLA (Tesla, Inc.): Tesla operates factories in China and relies on the Chinese market for significant sales, which could result in higher taxes if the convention is terminated.