Bill > HR961

This bill, titled the Permanent Active Financing Exception Act of 2015, makes permanent an existing exemption within the U.S. Internal Revenue Code that allows certain income earned by foreign corporations to be excluded from U.S. taxation. Specifically, it ensures that income derived from the active conduct of a banking, financing, or similar business, or from being a securities dealer or conducting an insurance business, will continue to be exempt from "subpart F" rules. Subpart F is a set of complex tax regulations designed to prevent U.S. taxpayers from deferring U.S. tax on certain types of income earned by their foreign corporations, often referred to as "passive" income. By making this exemption permanent, the bill provides certainty for businesses engaged in these active financial and insurance operations abroad, preventing this income from being taxed prematurely in the U.S. as if it were passive investment income.