[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2021 Introduced in Senate (IS)]
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119th CONGRESS
1st Session
S. 2021
To amend the Internal Revenue Code of 1986 to exclude round-tripped
income for purposes of calculating global intangible low-taxed income,
and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 11, 2025
Mr. Wyden (for himself, Mr. Warner, Mr. Warnock, and Mr. Welch)
introduced the following bill; which was read twice and referred to the
Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to exclude round-tripped
income for purposes of calculating global intangible low-taxed income,
and for other purposes.
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 ``Close the Round-Tripping Loophole
Act''.
SEC. 2. MODIFICATION TO DETERMINATION OF NET DEEMED INTANGIBLE INCOME
RETURN.
(a) In General.--Section 951A(b)(2)(A) of the Internal Revenue Code
of 1986 is amended--
(1) by striking ``10 percent of the aggregate of'' and
inserting ``10 percent of the excess (if any) of--
``(i) the aggregate of'', and
(2) by adding at the end the following new clause:
``(ii) an amount equal to the product of
the amount determined under clause (i) and the
round-tripping ratio, over''.
(b) Round-Tripping Ratio.--Section 951A(b) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(3) Round-tripping ratio.--For purposes of this
subsection--
``(A) In general.--The round-tripping ratio means,
with respect to any United States shareholder for any
taxable year, the percentage (not greater than 100
percent) which is equal to the ratio which--
``(i) the shareholder's round-tripped net
CFC tested income for such taxable year
determined under subparagraph (B), bears to
``(ii) the shareholder's net CFC tested
income for such taxable year, determined
without regard to this paragraph.
``(B) Shareholder's round-tripped net cfc tested
income.--For purposes of subparagraph (A)(i), a United
States shareholder's round-tripped net CFC tested
income for any taxable year is the net CFC tested
income of such shareholder which would be determined
under subsection (c) for such taxable year if--
``(i) the only income taken into account
under clause (i) of subsection (c)(2)(A) in
determining the tested income or tested loss of
each controlled foreign corporation taken into
account by such shareholder under subsection
(c)(1) for such taxable year were income
described in such clause which is derived in
connection with--
``(I) property--
``(aa) which is sold by the
taxpayer to any person who is a
United States person, or
``(bb) which the taxpayer
cannot establish to the
satisfaction of the Secretary
is for foreign use, or
``(II) services provided by the
taxpayer which the taxpayer cannot
establish to the satisfaction of the
Secretary are provided to any person,
or with respect to property, not
located within the United States, and
``(ii) the only deductions taken into
account under clause (ii) of subsection
(c)(2)(A) in determining such tested income or
tested loss were deductions properly allocable
to income described in clause (i).
``(C) Foreign use.--For purposes of this
subsection, the determination of whether property is
for a foreign use shall be made in the same manner as
under section 250(b).
``(D) Exception for certain small taxpayers.--
``(i) In general.--In the case of any
United States shareholder described in clause
(ii), the round-tripping ratio shall be 0
percent.
``(ii) Taxpayer described.--
``(I) In general.--A United States
shareholder is described in this clause
if the average annual gross receipts of
such United States shareholder for the
3-taxable year period ending with the
taxable year which precedes such
taxable year does not exceed
$100,000,000.
``(II) Application of certain
rules.--Rules similar to the rules of
paragraphs (2)(B) and (3) of section
59A(e) shall apply for purposes of this
clause.''.
(c) Effective Date.--The amendments made by this section shall
apply taxable years of foreign corporations beginning after the date of
the enactment of this Act, and to taxable years of United States
shareholders in which or with which such taxable years of foreign
corporations end.
SEC. 3. LIMITATION ON DEDUCTION FOR GLOBAL INTANGIBLE LOW-TAXED INCOME.
(a) In General.--Section 250(a)(1)(B) of the Internal Revenue Code
of 1986 is amended to read as follows:
``(B) 50 percent of the excess (if any) of--
``(i) the sum of--
``(I) the global intangible low-
taxed income amount (if any) which is
included in the gross income of such
domestic corporation under section 951A
for such taxable year, and
``(II) the amount treated as a
dividend received by such corporation
under section 78 which is attributable
to the amount described in subclause
(I), over
``(ii) an amount equal to the product of
the amount determined under clause (i) and the
round-tripping ratio (as determined under
section 951A(b)(3)) of such domestic
corporation for such taxable year.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after the date of the enactment of this Act.
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