Bill > S2021

This bill aims to address a tax loophole related to "round-tripping" income for multinational corporations by modifying how Global Intangible Low-Taxed Income (GILTI) is calculated. Specifically, the bill introduces a "round-tripping ratio" that reduces the amount of income a U.S. shareholder can claim as tax-exempt if the income appears to be artificially routed through foreign corporations to avoid U.S. taxes. The bill defines round-tripped income as revenue from property sold to U.S. persons or property/services that cannot be proven to be used or provided outside the United States. It requires corporations to calculate a ratio comparing their round-tripped net controlled foreign corporation (CFC) tested income to their total net CFC tested income, which will then be used to reduce their tax deductions. An exception is provided for smaller taxpayers with average annual gross receipts under $100 million, who will not have their deductions reduced. The changes will apply to taxable years of foreign corporations beginning after the bill's enactment, with the goal of preventing corporations from manipulating international tax rules to minimize their U.S. tax liability.

Budget and Finance

https://www.congress.gov/bill/119th-congress/senate-bill/2021/all-info