,i #aac? ,,congress #a/ ,session ,h4 ,r4 #fid ,,9 ,,! ,,h\se ,,( ,,repres5tatives ,febru>y #ad1 #bjac ,ms4 ,s*ak[sky introduc$ ! foll[+ bill2 :i* 0 ref]r$ to ! ,committee on ,ways & ,means ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to prev5t ! avoidance by corporations ( tax on =eign income4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,corporate ,tax ,fairness ,act4 #b4 ,def]ral ( ,active ,income ( ,controll$ ,=eign ,corporations ,section #ieb ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by add+ at ! end ! foll[+ new subsection3 7d7 ,special ,application ( ,subp>t 7#a7 ,9 g5]al ,= taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjac1 not)/&+ any o!r provision ( ?is subp>t1 ! t]m subp>t ,f income means1 9 ! case ( any controll$ =eign corporation1 ! income ( su* corporation d]iv$ f any =eign c\ntry4 7#b7 ,applicable rules ,rules simil> to ! rules "u ! la/ s5t5ce ( subsection 7a7 & subsection 7d7 %all apply to ?is subsection4 4 #c4 ,modifications ( =eign tax cr$it rules applicable to l>ge integrat$ oil companies :i* are dual capacity taxpay]s 7a7 ,9 g5]al ,section #ija ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ subsection 7n7 z subsection 7o7 & by ins]t+ aft] subsection 7m7 ! foll[+ new subsection3 7n7 ,special rules relat+ to l>ge integrat$ oil companies :i* are dual capacity taxpay]s 7#a7 ,g5]al rule ,not)/&+ any o!r provision ( ?is *apt]1 any am\nt paid or accru$ by a dual capacity taxpay] :i* is a l>ge integrat$ oil company to a =eign c\ntry or possession ( ! ,unit$ ,/ates = any p]iod %all n be consid]$ a tax-- 7,a7 if1 = su* p]iod1 ! =eign c\ntry or possession does n impose a g5]ally applicable income tax1 or 7,b7 to ! ext5t su* am\nt exce$s ! am\nt 7det]m9$ 9 accordance ) regulations7 :i*-- 7i7 is paid by su* dual capacity taxpay] pursuant to ! g5]ally applicable income tax impos$ by ! c\ntry or possession1 or 7ii7 w\ld be paid if ! g5]ally applicable income tax impos$ by ! c\ntry or possession 7 applicable to su* dual capacity taxpay]4 ,no?+ 9 ?is p>agraph %all be con/ru$ to imply ! prop] treatm5t ( any su* am\nt n 9 excess ( ! am\nt det]m9$ "u subp>agraph 7,b74 7#b7 ,dual capacity taxpay] ,= purposes ( ?is subsection1 ! t]m dual capacity taxpay] means1 ) respect to any =eign c\ntry or possession ( ! ,unit$ ,/ates1 a p]son :o-- 7,a7 is subject to a levy ( su* c\ntry or possession1 & 7,b7 receives 7or w receive7 directly or indirectly a specific economic b5efit 7z det]m9$ 9 accordance ) regulations7 f su* c\ntry or possession4 7#c7 ,g5]ally applicable income tax ,= purposes ( ?is subsection-- 7,a7 ,9 g5]al ,! t]m g5]ally applicable income tax means an income tax 7or a s]ies ( income taxes7 :i* is g5]ally impos$ "u ! laws ( a =eign c\ntry or possession on income d]iv$ f ! conduct ( a trade or bus9ess )9 su* c\ntry or possession4 7,b7 ,exceptions ,su* t]m %all n include a tax unless x has sub/antial application1 by its t]ms & 9 practice1 to-- 7i7 p]sons :o are n dual capacity taxpay]s1 & 7ii7 p]sons :o are citiz5s or resid5ts ( ! =eign c\ntry or possession4 7#d7 ,l>ge integrat$ oil company ,= purposes ( ?is subsection1 ! t]m l>ge integrat$ oil company means1 ) respect to any taxable ye>1 an integrat$ oil company 7z def9$ 9 section #bia7;b77#d77 :i*-- 7,a7 _h gross receipts 9 excess ( #a1jjj1jjj1jjj = su* taxable ye>1 & 7,b7 has an av]age daily worldwide production ( crude oil ( at lea/ #ejj1jjj b>rels = su* taxable ye>4 4 7b7 ,effective date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to taxes paid or accru$ 9 taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,contr>y treaty obligations upheld ,! am5dm5ts made by ?is section %all n apply to ! ext5t contr>y to any treaty obligation ( ! ,unit$ ,/ates4 #d4 ,re9/itution ( p] c\ntry =eign tax cr$it 7a7 ,9 g5]al ,subsection 7a7 ( section #ijd ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ to read z foll[s3 7a7 ,limitation ,! am\nt ( ! cr$it 9 respect ( ! tax paid or accru$ to any =eign c\ntry or possession ( ! ,unit$ ,/ates %all n exce$ ! same proportion ( ! tax aga9/ :i* su* cr$it is tak5 :i* ! taxpay]'s taxable income f s\rces )9 su* c\ntry or possession 7b n 9 excess ( ! taxpay]'s entire taxable income7 be>s to su* taxpay]'s entire taxable income = ! same taxable ye>4 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to taxable ye>s beg9n+ aft] ,decemb] #ca1 #bjac4 #e4 ,treatm5t ( =eign corporations manag$ & controll$ 9 ! ,unit$ ,/ates z dome/ic corporations 7a7 ,9 g5]al ,section #ggja ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ by r$esignat+ subsection 7p7 z subsection 7q7 & by ins]t+ aft] subsection 7o7 ! foll[+ new subsection3 7p7 ,c]ta9 corporations manag$ & controll$ 9 ! ,unit$ ,/ates treat$ z dome/ic = income tax 7#a7 ,9 g5]al ,not)/&+ subsection 7a77#d71 9 ! case ( a corporation describ$ 9 p>agraph 7#b7 if-- 7,a7 ! corporation w\ld n o!rwise be treat$ z a dome/ic corporation = purposes ( ?is title1 b 7,b7 ! managem5t & control ( ! corporation occurs1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates1 !n1 solely = purposes ( *apt] #a 7& any o!r provision ( ?is title relat+ to *apt] #a71 ! corporation %all be treat$ z a dome/ic corporation4 7#b7 ,corporation describ$ 7,a7 ,9 g5]al ,a corporation is describ$ 9 ?is p>agraph if-- 7i7 ! /ock ( su* corporation is regul>ly trad$ on an e/abli%$ securities m>ket1 or 7ii7 ! aggregate gross assets ( su* corporation 7or any pr$ecessor !re(71 includ+ assets "u managem5t = inve/ors1 :e!r held directly or indirectly1 at any "t dur+ ! taxable ye> or any prec$+ taxable ye> is #ej1jjj1jjj or m4 7,b7 ,g5]al exception ,a corporation %all n be treat$ z describ$ 9 ?is p>agraph if-- 7i7 su* corporation 0 treat$ z a corporation describ$ 9 ?is p>agraph 9 a prec$+ taxable ye>1 7ii7 su* corporation-- 7,i7 is n regul>ly trad$ on an e/abli%$ securities m>ket1 & 7,,ii7 has1 & is reasonably expect$ to cont9ue to h1 aggregate gross assets 7includ+ assets "u managem5t = inve/ors1 :e!r held directly or indirectly7 ( less ?an #ej1jjj1jjj1 & 7iii7 ! ,secret>y grants a waiv] to su* corporation "u ?is subp>agraph4 7,c7 ,exception f gross assets te/ ,subp>agraph 7,a77ii7 %all n apply to a corporation :i* is a controll$ =eign corporation 7z def9$ 9 section #ieg7 & :i* is a memb] ( an affiliat$ gr\p 7z def9$ section #aejd1 b det]m9$ )\t reg>d to section #aejd7;b77#c77 ! common p>5t ( :i*-- 7i7 is a dome/ic corporation 7det]m9$ )\t reg>d to ?is subsection71 & 7ii7 has sub/antial assets 7o!r ?an ca% & ca% equival5ts & o!r ?an /ock ( =eign subsidi>ies7 held = use 9 ! active conduct ( a trade or bus9ess 9 ! ,unit$ ,/ates4 7#c7 ,managem5t & control 7,a7 ,9 g5]al ,! ,secret>y %all prescribe regulations = purposes ( det]m9+ cases 9 :i* ! managem5t & control ( a corporation is to be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates4 7,b7 ,executive (fic]s & s5ior managem5t ,su* regulations %all provide t-- 7i7 ! managem5t & control ( a corporation %all be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates if sub/antially all ( ! executive (fic]s & s5ior managem5t ( ! corporation :o ex]cise day-to-day responsibility = mak+ decisions involv+ /rategic1 f9ancial1 & op]ational policies ( ! corporation are locat$ prim>ily )9 ! ,unit$ ,/ates1 & 7ii7 individuals :o are n executive (fic]s & s5ior managem5t ( ! corporation 7includ+ individuals :o are (fic]s or employees ( o!r corporations 9 ! same *a9 ( corporations z ! corporation7 %all be treat$ z executive (fic]s & s5ior managem5t if su* individuals ex]cise ! day-to-day responsibilities ( ! corporation describ$ 9 clause 7i74 7,c7 ,corporations prim>ily hold+ inve/m5t assets ,su* regulations %all also provide t ! managem5t & control ( a corporation %all be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates if-- 7i7 ! assets ( su* corporation 7directly or indirectly7 consi/ prim>ily ( z sets be+ manag$ on behalf ( inve/ors1 & 7ii7 decisions ab\t h[ to inve/ ! assets are made 9 ! ,unit$ ,/ates4 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ on or aft] ! date :i* is #b ye>s aft] ! date ( ! enactm5t ( ?is ,act4