,i  #aacth ,,congress  #ast ,session    
,h4 ,r4 #fid  ,,in ,,the ,,house ,,of   
,,representatives  ,february #ad1 #bjac 
,ms4 ,schakowsky introduced the         
following bill2 which was referred to   
the ,committee on ,ways and ,means  ,a  
,,bill  ,to amend the ,internal ,revenue
 ,code of #aihf to prevent the avoidance
 by corporations of tax on foreign      
income4  #a4 ,short title ,this ,act may
 be cited as the ,corporate ,tax        
,fairness ,act4  #b4 ,deferral of       
,active ,income of ,controlled ,foreign 
,corporations ,section #ieb of the      
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new subsection3  7d7 ,special 
,application of ,subpart  7#a7 ,in      
general ,for taxable years beginning    
after ,december #ca1 #bjac1             
notwithstanding any other provision of  
this subpart1 the term subpart ,f income
 means1 in the case of any controlled   
foreign corporation1 the income of such 
corporation derived from any foreign    

country4  7#b7 ,applicable rules ,rules 
similar to the rules under the last     
sentence of subsection 7a7 and          
subsection 7d7 shall apply to this      
subsection4  4  #c4 ,modifications of   
foreign tax credit rules applicable to  
large integrated oil companies which are
 dual capacity taxpayers  7a7 ,in       
general ,section #ija of the ,internal  
,revenue ,code of #aihf is amended by   
redesignating subsection 7n7 as         
subsection 7o7 and by inserting after   
subsection 7m7 the following new        
subsection3  7n7 ,special rules relating
 to large integrated oil companies which
 are dual capacity taxpayers  7#a7      
,general rule ,notwithstanding any other
 provision of this chapter1 any amount  
paid or accrued by a dual capacity      
taxpayer which is a large integrated oil
 company to a foreign country or        
possession of the ,united ,states for   
any period shall not be considered a    
tax--  7,a7 if1 for such period1 the    
foreign country or possession does not  

impose a generally applicable income    
tax1 or  7,b7 to the extent such amount 
exceeds the amount 7determined in       
accordance with regulations7 which--    
7i7 is paid by such dual capacity       
taxpayer pursuant to the generally      
applicable income tax imposed by the    
country or possession1 or  7ii7 would be
 paid if the generally applicable income
 tax imposed by the country or          
possession were applicable to such dual 
capacity taxpayer4  ,nothing in this    
paragraph shall be construed to imply   
the proper treatment of any such amount 
not in excess of the amount determined  
under subparagraph 7,b74  7#b7 ,dual    
capacity taxpayer ,for purposes of this 
subsection1 the term dual capacity      
taxpayer means1 with respect to any     
foreign country or possession of the    
,united ,states1 a person who--  7,a7 is
 subject to a levy of such country or   
possession1 and  7,b7 receives 7or will 
receive7 directly or indirectly a       
specific economic benefit 7as determined

 in accordance with regulations7 from   
such country or possession4  7#c7       
,generally applicable income tax ,for   
purposes of this subsection--  7,a7 ,in 
general ,the term generally applicable  
income tax means an income tax 7or a    
series of income taxes7 which is        
generally imposed under the laws of a   
foreign country or possession on income 
derived from the conduct of a trade or  
business within such country or         
possession4  7,b7 ,exceptions ,such term
 shall not include a tax unless it has  
substantial application1 by its terms   
and in practice1 to--  7i7 persons who  
are not dual capacity taxpayers1 and    
7ii7 persons who are citizens or        
residents of the foreign country or     
possession4  7#d7 ,large integrated oil 
company ,for purposes of this           
subsection1 the term large integrated   
oil company means1 with respect to any  
taxable year1 an integrated oil company 
7as defined in section #bia7;b77#d77    
which--  7,a7 had gross receipts in     

excess of #a1jjj1jjj1jjj for such       
taxable year1 and  7,b7 has an average  
daily worldwide production of crude oil 
of at least #ejj1jjj barrels for such   
taxable year4  4  7b7 ,effective date   
7#a7 ,in general ,the amendments made by
 this section shall apply to taxes paid 
or accrued in taxable years beginning   
after the date of the enactment of this 
,act4  7#b7 ,contrary treaty obligations
 upheld ,the amendments made by this    
section shall not apply to the extent   
contrary to any treaty obligation of the
 ,united ,states4  #d4 ,reinstitution of
 per country foreign tax credit  7a7 ,in
 general ,subsection 7a7 of section #ijd
 of the ,internal ,revenue ,code of     
#aihf is amended to read as follows3    
7a7 ,limitation ,the amount of the      
credit in respect of the tax paid or    
accrued to any foreign country or       
possession of the ,united ,states shall 
not exceed the same proportion of the   
tax against which such credit is taken  
which the taxpayer's taxable income from

 sources within such country or         
possession 7but not in excess of the    
taxpayer's entire taxable income7 bears 
to such taxpayer's entire taxable income
 for the same taxable year4  4  7b7     
,effective date ,the amendment made by  
this section shall apply to taxable     
years beginning after ,december #ca1    
#bjac4  #e4 ,treatment of foreign       
corporations managed and controlled in  
the ,united ,states as domestic         
corporations  7a7 ,in general ,section  
#ggja of the ,internal ,revenue ,code of
 #aihf is amended by redesignating      
subsection 7p7 as subsection 7q7 and by 
inserting after subsection 7o7 the      
following new subsection3  7p7 ,certain 
corporations managed and controlled in  
the ,united ,states treated as domestic 
for income tax  7#a7 ,in general        
,notwithstanding subsection 7a77#d71 in 
the case of a corporation described in  
paragraph 7#b7 if--  7,a7 the           
corporation would not otherwise be      
treated as a domestic corporation for   

purposes of this title1 but  7,b7 the   
management and control of the           
corporation occurs1 directly or         
indirectly1 primarily within the ,united
 ,states1  then1 solely for purposes of 
chapter #a 7and any other provision of  
this title relating to chapter #a71 the 
corporation shall be treated as a       
domestic corporation4  7#b7 ,corporation
 described  7,a7 ,in general ,a         
corporation is described in this        
paragraph if--  7i7 the stock of such   
corporation is regularly traded on an   
established securities market1 or  7ii7 
the aggregate gross assets of such      
corporation 7or any predecessor         
thereof71 including assets under        
management for investors1 whether held  
directly or indirectly1 at any time     
during the taxable year or any preceding
 taxable year is #ej1jjj1jjj or more4   
7,b7 ,general exception ,a corporation  
shall not be treated as described in    
this paragraph if--  7i7 such           
corporation was treated as a corporation

 described in this paragraph in a       
preceding taxable year1  7ii7 such      
corporation--  7,i7 is not regularly    
traded on an established securities     
market1 and  7,,ii7 has1 and is         
reasonably expected to continue to have1
 aggregate gross assets 7including      
assets under management for investors1  
whether held directly or indirectly7 of 
less than #ej1jjj1jjj1 and  7iii7 the   
,secretary grants a waiver to such      
corporation under this subparagraph4    
7,c7 ,exception from gross assets test  
,subparagraph 7,a77ii7 shall not apply  
to a corporation which is a controlled  
foreign corporation 7as defined in      
section #ieg7 and which is a member of  
an affiliated group 7as defined section 
#aejd1 but determined without regard to 
section #aejd7;b77#c77 the common parent
 of which--  7i7 is a domestic          
corporation 7determined without regard  
to this subsection71 and  7ii7 has      
substantial assets 7other than cash and 
cash equivalents and other than stock of

 foreign subsidiaries7 held for use in  
the active conduct of a trade or        
business in the ,united ,states4  7#c7  
,management and control  7,a7 ,in       
general ,the ,secretary shall prescribe 
regulations for purposes of determining 
cases in which the management and       
control of a corporation is to be       
treated as occurring primarily within   
the ,united ,states4  7,b7 ,executive   
officers and senior management ,such    
regulations shall provide that--  7i7   
the management and control of a         
corporation shall be treated as         
occurring primarily within the ,united  
,states if substantially all of the     
executive officers and senior management
 of the corporation who exercise        
day-to-day responsibility for making    
decisions involving strategic1          
financial1 and operational policies of  
the corporation are located primarily   
within the ,united ,states1 and  7ii7   
individuals who are not executive       
officers and senior management of the   

corporation 7including individuals who  
are officers or employees of other      
corporations in the same chain of       
corporations as the corporation7 shall  
be treated as executive officers and    
senior management if such individuals   
exercise the day-to-day responsibilities
 of the corporation described in clause 
7i74  7,c7 ,corporations primarily      
holding investment assets ,such         
regulations shall also provide that the 
management and control of a corporation 
shall be treated as occurring primarily 
within the ,united ,states if--  7i7 the
 assets of such corporation 7directly or
 indirectly7 consist primarily of as    
sets being managed on behalf of         
investors1 and  7ii7 decisions about how
 to invest the assets are made in the   
,united ,states4  4  7b7 ,effective date
 ,the amendments made by this section   
shall apply to taxable years beginning  
on or after the date which is #b years  
after the date of the enactment of this 
,act4