Highlight any text to annotate

H.R. 1911 amends the tax code to exempt certain payments made by U.S. companies to foreign subsidiaries from being classified as "base erosion payments" — a category that currently triggers additional U.S. tax liability. Specifically, payments to foreign related parties will not be treated as base erosion payments if they are subject to a foreign income tax rate of at least 15 percent. The bill affects U.S. corporations with foreign operations, particularly multinational companies that make intercompany payments to subsidiaries overseas. The legislation allows companies to establish the foreign tax rate using financial statements, with adjustments for various items the Treasury Secretary may specify. The changes take effect for tax years beginning after the bill becomes law, with the Treasury Department authorized to issue regulations setting procedures for determining foreign tax rates and preventing tax avoidance schemes.

Add a comment

Sign in to comment on this bill.

Annotate the text

Highlight any passage on the Summary or Full Text tab to attach a note. Annotations appear on the Annotations tab.