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US S1636

Stop Corporate Inversions Act of 2017


summary

Introduced
07/26/2017
In Committee
07/26/2017
Crossed Over
Passed
Dead
12/31/2018

Introduced Session

115th Congress

Bill Summary

Stop Corporate Inversions Act of 2017 This bill amends the Internal Revenue Code to revise rules for the taxation of inverted corporations (i.e., U.S. corporations that acquire foreign companies to reincorporate in a foreign jurisdiction with income tax rates lower than the United States). The bill provides that a foreign corporation that acquires the properties of a U.S. corporation or partnership after May 8, 2014, shall be treated as an inverted corporation and thus subject to U.S. taxation if, after such acquisition: (1) it holds more than 50% of the stock of the new entity (expanded affiliated group), or (2) the management or control of the new entity occurs primarily within the United States and the new entity has significant domestic business activities.

AI Summary

This bill amends the Internal Revenue Code to revise the rules for the taxation of inverted corporations. An "inverted corporation" refers to a U.S. corporation that acquires a foreign company to reincorporate in a foreign jurisdiction with lower income tax rates than the United States. The bill provides that a foreign corporation that acquires the properties of a U.S. corporation or partnership after May 8, 2014, shall be treated as an inverted corporation and thus subject to U.S. taxation if more than 50% of the stock of the new entity is held by former shareholders or partners of the U.S. entity, or if the management and control of the new entity primarily occurs within the U.S. and the new entity has significant domestic business activities. The bill also includes provisions for determining when a foreign corporation has "substantial business activities" in the foreign country where it is organized, to be exempted from the inverted corporation treatment.

Committee Categories

Budget and Finance

Sponsors (13)

Last Action

Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S4301-4302) (on 07/26/2017)

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