[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 20 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 20
To amend the Internal Revenue Code of 1986 to modify the global
intangible low-taxed income by repealing the tax-free deemed return on
investments and determining net CFC tested income on a per-country
basis.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 22, 2021
Ms. Klobuchar introduced the following bill; which was read twice and
referred to the Committee on Finance
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A BILL
To amend the Internal Revenue Code of 1986 to modify the global
intangible low-taxed income by repealing the tax-free deemed return on
investments and determining net CFC tested income on a per-country
basis.
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 ``Removing Incentives for Outsourcing
Act''.
SEC. 2. MODIFICATION OF TAX ON GLOBAL INTANGIBLE LOW-TAXED INCOME.
(a) Repeal of Tax-Free Deemed Return on Investments.--
(1) In general.--Section 951A(a) of the Internal Revenue
Code of 1986 is amended by striking ``global intangible low-
taxed income'' and inserting ``net CFC tested income''.
(2) Conforming amendments.--
(A) Section 951A of such Code is amended by
striking subsections (b) and (d).
(B) Section 951A(e)(1) of such Code is amended by
striking ``subsections (b), (c)(1)(A), and'' and
inserting ``subsections (c)(1)(A) and''.
(C) Section 951A(f) of such Code is amended to read
as follows:
``(f) Treatment as Subpart F Income for Certain Purposes.--
``(1) In general.--Except as provided in paragraph (2), any
net CFC tested income included in gross income under subsection
(a) shall be treated in the same manner as an amount included
under section 951(a)(1)(A) for purposes of applying sections
168(h)(2)(B), 535(b)(10), 851(b), 904(h)(1), 959, 961, 962,
993(a)(1)(E), 996(f)(1), 1248(b)(1), 1248(d)(1), 6501(e)(1)(C),
6654(d)(2)(D), and 6655(e)(4).
``(2) Exception.--The Secretary shall provide rules for the
application of paragraph (1) to other provisions of this title
in any case in which the determination of subpart F income is
required to be made at the level of the controlled foreign
corporation.''.
(D) Section 960(d)(2)(A) of such Code is amended by
striking ``global intangible low-taxed income (as
defined in section 951A(b))'' and inserting ``net CFC
tested income (as defined in section 951A(c))''.
(b) Determination of Net CFC Tested Income on Country-by-Country
Basis.--Section 951A of the Internal Revenue Code of 1986 is amended by
adding at the end the following:
``(g) Determination Made on Country-by-Country Basis.--
``(1) In general.--This section shall be applied with
respect to a United States shareholder of the controlled
foreign corporation separately with respect to each foreign
country in which the controlled foreign corporation conducts
any trade or business.
``(2) Special rules.--
``(A) In general.--For purposes of making country-
by-country determinations under this section and
sections 904 and 960 with respect to net CFC tested
income for a taxable year pursuant to paragraph (1)--
``(i) taxes paid or accrued to a foreign
country by the controlled foreign corporation
shall be assigned to that country, and
``(ii) earnings to which such taxes relate
shall be treated as income assigned to the
country to which those tax payments are made.
``(B) Earnings assigned to two or more countries.--
If the same earnings are assigned to two or more
countries under subparagraph (A), for purposes of
paragraph (1) such earnings and the taxes related
thereto shall be treated as assigned to the country
with the highest statutory corporate tax rate.
``(3) Earnings not subject to tax.--If earnings are not
subject to tax by any country, then with respect to those
earnings paragraph (1) shall not apply.
``(4) Regulations.--The Secretary shall prescribe such
regulations as may be necessary or appropriate to carry out
this subsection, including the time period in which foreign
earnings and the associated foreign taxes are assigned to a
country.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to taxable years of controlled foreign corporations
beginning after December 31, 2021, and to taxable years of United
States shareholders in which or with which such taxable years of
foreign corporations end.
SEC. 3. STUDY AND REPORT ON RESTRUCTURING INTERNATIONAL TAX LAWS.
(a) Study.--The Chief of Staff of the Joint Committee on Taxation
shall study options for the reform of laws related to the taxation of
income from international sources, including the provisions of sections
59A, 250, and 951A of the Internal Revenue Code of 1986. Such study
include an evaluation of each option considered with respect to--
(1) the extent to which the option increases or decreases
opportunities for tax avoidance; and
(2) the extent to which the option increases or decreases
incentives for domestic businesses to shift jobs and operations
to other countries.
(b) Report.--Not later than 90 days after the date of the enactment
of this Act, the Chief of Staff on the Joint Committee on Taxation
shall submit to Congress a report on the results of the study conducted
under subsection (a).
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