,i #aadth ,,congress #b;d ,session ,h4 ,r4 #eede ,,in ,,the ,,house ,,of ,,representatives ,june #ba1 #bjaf,mr4 ,boustany 7for himself1 ,mr4 ,roskam1 ,mr4 ,tiberi1 ,mr4 ,buchanan1 ,mr4 ,sam ,johnson of ,texas1 ,mr4 ,reichert1 ,mr4 ,young of ,indiana1 ,mr4 ,nunes1 and ,mrs4 ,black7 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 modify the application of certain rules with respect to certain foreign countries4 #a4 ,short title ,this ,act may be cited as the ,preventing ,investment in ,terrorist ,regimes ,act4 #b4 ,modification of application of certain rules with respect to certain foreign countries 7a7 ,limitation on waiver authority ,section #ija7;j77#e77;,a7 of the ,internal ,revenue ,code of #aihf is amended by inserting 7other than a country described in paragraph 7#b77;,a77iv77 after a country4 7b7 ,denial of foreign tax credit with respect to income derived from certain foreign countries without regard to which country tax is paid ,subparagraph 7,a7 of section #ija7;j77#a7 of such ,code is amended by striking to any country and all that follows and inserting to-- 7i7 any foreign country to which this subsection applies if such taxes are with respect to income attributable to a period during which this subsection applies to such foreign country1 and 7ii7 any foreign country 7without regard to whether this subsection applies to such foreign country7 if such taxes are with respect to income derived from any foreign country to which this subsection applies during a period for which this subsection so applies 7determined under rules similar to the rules of section #ieb7;d771 and 4 7c7 ,denial of deduction for taxes for which foreign tax credit is denied1 etc ,section #ija7;j77#c7 of such ,code is amended to read as follows3 7#c7 ,denial of deduction for taxes for which foreign tax credit is denied1 etc 7,a7 ,in general ,no deduction shall be allowed under this chapter for any tax for which credit is not allowable under this section by reason of paragraph 7#a77;,a74 7,b7 ,denial of deduction parity ,solely for purposes of section #gh1 the taxes deemed to be paid under section #ijb7;a7 and #ifj7;a77#a7 shall be determined without regard to this subsection4 4 7d7 ,application of denial of deduction for taxes paid by controlled foreign corporations 7#a7 ,determination of subpart ,f income ,section #ieb7;a7 of such ,code is amended by striking 7including taxes7 in the last sentence and inserting 7including taxes other than taxes for which credit is not allowed under section #ija by reason of section #ija7;j77#a77;,a774 7#b7 ,determination of earnings and profits ,section #ifd7;a7 of such ,code is amended by inserting 1 or any taxes for which credit is not allowed under section #ija by reason of section #ija7;j77#a77;,a71 after other payment 7within the meaning of section #afb7;c774 7e7 ,clarification regarding country from which income is derived ,section #ieb7;d7 of such ,code is amended by striking ,the ,secretary and inserting the following3 7#a7 ,in general ,for purposes of subsection 7a77#e71 income shall be treated as derived from a foreign country if such income is derived in connection with-- 7,a7 property which is sold-- 7i7 for use1 consumption1 or disposition in such foreign country1 or 7ii7 to any foreign person which is created1 organized1 or controlled in such foreign country or to a citizen or resident of such foreign country1 or 7,b7 services provided with respect to persons or property located in such foreign country or with respect to persons described in subparagraph 7,a77ii74 7#b7 ,special rules ,for purposes of this subsection-- 7,a7 ,ultimate disposition ,property shall not fail to be treated as described in paragraph 7#a77;,a7 if the controlled foreign corporation or any related person knew1 or had reason to know1 that such property would be ultimately sold-- 7i7 for use1 consumption1 or disposition in such foreign country1 or 7ii7 to any person described in paragraph 7#a77;,a77ii74 7,b7 ,sales to related parties ,if property is sold to a related person1 such sale shall not fail to be treated as described in paragraph 7#a77;,a7 unless-- 7i7 such property is ultimately sold-- 7,i7 for use1 consumption or disposition outside such foreign country1 or 7,,ii7 to a person not described in paragraph 7#a77;,a77ii71 or 7ii7 such property is resold to an unrelated person not described in paragraph 7#a77;,a77ii7 and neither the controlled foreign corporation nor any related person knew or had reason to know that such property would be ultimately sold in a sale described in paragraph 7#a77;,a74 7,c7 ,application to services ,rules similar to the rules of subparagraphs 7,a7 and 7,b7 shall apply with respect to services described in paragraph 7#a77;,b74 7,d7 ,related person ,the term related person has the meaning given such term by section #ied7;d77#c74 7#c7 ,regulations ,the ,secretary 4 7f7 ,doubling of rates of tax with respect to certain foreign countries 7#a7 ,doubling of rates of tax on citizens and corporations of certain foreign countries ,section #hia of such ,code is amended-- 7,a7 by striking ,whenever the ,president and inserting the following3 7a7 ,doubling of rates of tax on citizens and corporations of certain foreign countries 7#a7 ,presidential proclamation ,whenever the ,president 1 and 7,b7 by adding at the end the following new paragraph3 7#b7 ,statutory application ,in the case of any foreign country to which section #ija7;j7 applies for any period1 paragraph 7#a7 shall apply with respect to such country in the same manner as if the ,president had made a proclamation described in the first sentence of paragraph 7#a7 with respect to such country at the beginning of such period and a proclamation described in the last sentence of paragraph 7#a7 with respect to such country at the end of such period4 4 7#b7 ,doubling of rates of tax on income derived from certain foreign countries ,section #hia of such ,code1 as amended by paragraph 7#a71 is amended by adding at the end the following new subsection3 7b7 ,doubling of rates of tax on income derived from certain foreign countries 7#a7 ,in general ,in the case of any foreign country to which section #ija7;j7 applies for any period1 the rates of tax imposed by sections #a1 #aa1 #hja1 #hca1 #heb1 #hga1 and #hha with respect to any taxpayer shall be doubled in the case of income derived from such foreign country during such period 7determined under rules similar to the rules of section #ieb7;d774 ,in any case in which the manner in which income is stacked would change the rate of tax which is treated as applying to income described in the preceding sentence1 such income shall be stacked in the manner which results in the highest rate of tax applying to the income so described4 7#b7 ,coordination with doubling of rates of tax on citizens and corporations of certain foreign countries ,paragraph 7#a7 shall not apply to any taxpayer for any period for which subsection 7a7 applies to such taxpayer4 4 7#c7 ,conforming amendments 7,a7 ,the heading of section #hia of such ,code is amended by striking on citizens and corporations of and inserting with respect to4 7,b7 ,the item relating to section #hia in the table of sections for subpart ,d of part ,,ii of subchapter ,n of chapter #a of such ,code is amended to read as follows3 ,sec4 #hia4 ,doubling of rates of tax with respect to certain foreign countries4 4 7g7 ,prohibition on agreements ,to delegate certain reporting to certain foreign countries ,section #adgd7;f7 of such ,code is amended-- 7#a7 by striking ,the ,secretary and inserting the following3 7#a7 ,in general ,the ,secretary 1 and 7#b7 by adding at the end the following new paragraph3 7#b7 ,prohibition on intergovernmental agreements with certain foreign countries ,the ,secretary may not enter into any intergovernmental agreement to carry out section #adga7;b7 with any country to which section #ija7;j7 applies4 4 7h7 ,effective date 7#a7 ,in general ,except as otherwise provided in this subsection1 the amendments made by subsections 7a71 7b71 and 7c7 shall apply to taxes paid or incurred in taxable years ending after the date of the introduction of this ,act4 7#b7 ,amendments related to controlled foreign corporations ,the amendments made by-- 7,a7 subsections 7a71 7b71 and 7c7 to the extent such amendments relate to section #ieb7;a77#e7 of the ,internal ,revenue ,code of #aihf or to taxes deemed to have been paid under section #ijb or #ifj of such ,code1 and 7,b7 subsections 7d7 and 7e71 shall apply to taxable years of foreign corporations ending after the date of the introduction of this ,act and to taxable years of ,united ,states shareholders with or within which such taxable years of foreign corporations end4 7#c7 ,amendments related to doubling of tax on citizens and corporations of certain foreign countries ,the amendments made by subsection 7g7 shall apply to taxable years ending after the date of the introduction of this ,act 7without regard to whether the period described in subsection 7a77#b7 or 7b77#a7 of section #hia of the ,internal ,revenue ,code of #aihf1 as added by subsection 7f71 begins before such date74 7#d7 ,amendments related to prohibition on agreements to delegate certain reporting to certain foreign countries ,the amendments made by subsection 7g7 shall take effect on the date of the enactment of this ,act4