Sec. 138121. Modifications to deduction for foreign-derived intangible income and global intangible low-taxed income
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Section 250(a) is amended to read as follows: In the case of a domestic corporation for any taxable year, there shall be allowed as a deduction an amount equal to the sum of— 24.8 percent of the foreign-derived intangible income of such domestic corporation for such taxable year, plus 28.5 percent of— the global intangible low-taxed income (if any) which is included in the gross income of such domestic corporation under section 951A for such taxable year, and the amount treated as a dividend received by such corporation under section 78 which is attributable to the amount described in subparagraph (A). .
Section 172(d) is amended by striking paragraph (9). Section 250(b)(3) is amended— in subparagraph (A)(i)— by striking and at the end of subclause (V), by striking over at the end of subclause (VI), and by adding at the end the following new subclauses: any income described in clause
(i)or
(ii)of section 904(d)(2)(B), determined without regard to clause (iii)(II) thereof, except as otherwise provided by the Secretary, any income and gain from the sale or other disposition (including the deemed sale or other deemed disposition) of property giving rise to rents or royalties derived in the active conduct of a trade or business, and any disqualified extraterritorial income, over , and by adding at the end the following new subparagraph: For purposes of subparagraph (A)(i)(IX), the term disqualified extraterritorial income means any amount included in the gross income of the corporation with respect to any transaction for any taxable year if any amount could (determined after application of clause
(ii)but without regard to any election under section 942(a)(3) as in effect before its repeal) be excluded from the gross income of the corporation with respect to such transaction for such taxable year by reason of section 114 pursuant to the application of subsection
(d)or
(f)of section 101 of the American Jobs Creation Act of 2004. Except as provided in subclause (II), the corporation referred to in clause
(i)may make an irrevocable election (at such time and in such form and manner as the Secretary may provide) to have subsections
(d)and
(f)of section 101 of the American Jobs Creation Act of 2004 not apply with respect to such corporation for the taxable year for which such election is made and all succeeding taxable years (applicable with respect to all transactions, including transactions occurring before such taxable year). In the case of any corporation which is a member of an expanded affiliated group, the election described in subclause
(I)may be made only by the common parent of such group (or, in the case of a common parent which is not required to file a return of tax under this chapter, the delegate of such common parent) and shall apply with respect to all members of such group. For purposes of the preceding sentence, the term expanded affiliated group means an affiliated group as defined in section 1504(a), determined without regard to section 1504(b)(3) and by substituting more than 50 percent for at least 80 percent each place it appears. . Section 250(b)(5)(E) is amended by inserting (other than paragraph (3)(A)(i)(VIII)) after For purposes of this subsection . Section 613A(d)(1) is amended by striking and at the end of subparagraph (D), by striking the period at the end of subparagraph
(E)and inserting , and , and by inserting after subparagraph
(E)the following new subparagraph: any deduction allowable under section 250. . Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2022. The amendments made by subsection
(c)shall apply to taxable years beginning after the date of the enactment of this Act. The amendments made by subsection
(c)shall not be construed to create any inference with respect to the proper application of any provision of the Internal Revenue Code of 1986 with respect to any taxable year beginning before the taxable years to which such amendments apply. In the case of any taxable year which includes December 31, 2022 (other than a taxable year with respect to which such date is the last day of such taxable year)— the percentage in effect under section 250(a)(1)(A) of the Internal Revenue Code of 1986 shall be treated as being equal to the sum of— the pre-effective date percentage of 37.5 percent, plus the post-effective date percentage of 24.8 percent, and the percentage in effect under section 250(a)(1)(B) of such Code shall be treated as being equal to the sum of— the pre-effective date percentage of 50 percent, plus the post-effective date percentage of 28.5 percent. For purposes of this subsection, with respect to any taxable year— the term pre-effective date percentage means the ratio that the number of days in such taxable year which are before January 1, 2023, bears to the number of days in such taxable year, and the term post-effective date percentage means the ratio that the number of days in such taxable year which are after December 31, 2022, bears to the number of days in such taxable year.