Sec. 6. Low-taxed cross-border foreign income treated as subpart F income
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/bill/113/s/2162/is/section-6A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Subsection
(a)of section 952 of the Internal Revenue Code of 1986 is amended by redesignating paragraphs (3), (4), and
(5)as paragraphs (4), (5), and (6), respectively, and by inserting after paragraph
(2)the following new paragraph: low-taxed cross-border income (as defined under subsection (e)), . Section 952 of such Code is amended by adding at the end the following new subsection: For purposes of subsection (a), the term low-taxed cross-border income means the gross income of the controlled foreign corporation unless the taxpayer establishes to the satisfaction of the Secretary that— such income was derived in the home country of the controlled foreign corporation, or such income was subject to an effective rate of income tax imposed by a foreign country in excess of 15 percent. For purposes of paragraph (1)(A), income shall be treated as derived in the home country of a controlled foreign corporation only if— such income is derived in the conduct of a trade or business of such corporation in the country in which such corporation is created or organized, such corporation maintains an office or other fixed place of business in such country, and such income is derived in connection with— property which is sold for use, consumption, or disposition in such country, or services provided with respect to persons or property located in such country. Paragraph (1)(B) shall be applied— separately with respect to each foreign country in which a controlled foreign corporation conducts any trade or business, and with respect to the aggregate gross income derived with respect to such country. For purposes of determining the effective rate of income tax imposed by any foreign country under paragraph (1)(B)— such effective rate shall be determined without regard to any losses carried to the relevant taxable year, and to the extent the income of the controlled foreign corporation reduces losses in the relevant taxable year, such effective rate shall be treated as being the effective rate which would have been imposed on such income without regard to such losses. The gross income of a controlled foreign corporation taken into account under this subsection shall be reduced, under regulations prescribed by the Secretary, so as to take into account deductions (including taxes) properly allocable to such income. . 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.