Sec. 4201. Subpart F income to only include low-taxed foreign income

399 words·~2 min read·/bill/113/hr/1/ih/section-4201

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Subsection

(a)of section 954 is amended— by redesignating paragraphs (1), (2), (3), and

(5)as subparagraphs

(A)through (D), respectively, by striking For purposes of and inserting the following: For purposes of , and by adding at the end the following new paragraph: Foreign base company income shall only include items of income received by a controlled foreign corporation which are subject to an effective rate of income tax imposed by a foreign country which is less than 100 percent of the maximum rate of tax specified in section 11. In the case of foreign base company sales income, subparagraph

(A)shall be applied by substituting 50 percent for 100 percent . In the case of foreign base company intangible income, subparagraph

(A)shall be applied— by substituting the applicable percentage of the foreign percentage (determined under section 250(c) with respect to the controlled foreign corporation) for 100 percent , and by treating the foreign base company intangible income as a single item of income. For purposes of clause (ii)(I), the term applicable percentage means, with respect to any taxable year of a controlled foreign corporation, the percentage determined in accordance with the following table: In the case of any taxable year beginning in: The applicable percentage is: 2015 45 percent 2016 48 percent 2017 52 percent 2018 56 percent 2019 or thereafter 60 percent. . Subsection

(a)of section 953 is amended by redesignating paragraph

(2)as paragraph

(3)and by inserting after paragraph

(1)the following new paragraph: Insurance income shall only include items of income received by a controlled foreign corporation which are subject to an effective rate of income tax imposed by a foreign country which is less than the maximum rate of tax specified in section 11. . Section 954(b)(3)(B) is amended by striking paragraphs

(4)and

(5)and inserting subsection (a)(2), section 953(a)(2), and paragraph

(5)Section 954(b) is amended by striking paragraph (4). Section 954(c)(1) is amended by striking subsection (a)(1) and inserting this section . Section 954(d)(1) is amended by striking subsection (a)(2) and inserting this section . Section 954(e)(1) is amended by striking subsection (a)(3) and inserting this section . The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2014, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.