,,ii  #aah? ,,congress  #b;d ,session   
,s4 #djih  ,,9 ,,! ,,s5ate ,,( ,,!      
,,unit$ ,,/ates  ,april #aj1 #bjbd,mr4  
,s&]s introduc$ ! foll[+ bill2 :i* 0    
read twice & ref]r$ to ! ,committee on  
,f9ance  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to modify !       
treatm5t ( =eign corporations1 & = o!r  
purposes4  #a4 ,%ort title ,?is ,act may
 be cit$ z ! ,corporate ,tax ,dodg+     
,prev5tion ,act4  #b4 ,re/oration (     
progressive corporate tax rate  7a7 ,9  
g5]al ,section #aa7;b7 ( ! ,int]nal     
,rev5ue ,code ( #aihf is am5d$ to read z
 foll[s3  7b7 ,am\nt ( tax  7#a7 ,9     
g5]al ,! am\nt ( ! tax impos$ by        
subsection 7a7 %all be ! sum (-- 7,a7   
#ae p]c5t ( s mu* ( ! taxable income z  
does n exce$ #ej1jjj1  7,b7 #be p]c5t ( 
s mu* ( ! taxable income z exce$s       
#ej1jjj b does n exce$ #ge1jjj1  7,c7   
#cd p]c5t ( s mu* ( ! taxable income z  
exce$s #ge1jjj b does n exce$           
#aj1jjj1jjj1 &  7,d7 #ce p]c5t ( s mu* (
 ! taxable income z exce$s #aj1jjj1jjj4 

,9 ! case ( a corporation :i* has       
taxable income 9 excess ( #ajj1jjj = any
 taxable ye>1 ! am\nt ( tax det]m9$ "u !
 prec$+ s5t5ce = su* taxable ye> %all be
 increas$ by ! less] ( 7i7 #e p]c5t (   
su* excess1 or 7ii7 #aa1gej4 ,9 ! case (
 a corporation :i* has taxable income 9 
excess ( #ae1jjj1jjj1 ! am\nt ( ! tax   
det]m9$ "u ! =ego+ provisions ( ?is     
p>agraph %all be increas$ by an         
additional am\nt equal to ! less] ( 7i7 
#c p]c5t ( su* excess1 or 7ii7 #ajj1jjj4
  7#b7 ,c]ta9 p]sonal s]vice            
corporations n eligible = graduat$ rates
 ,not)/&+ p>agraph 7#a71 ! am\nt ( ! tax
 impos$ by subsection 7a7 on ! taxable  
income ( a qualifi$ p]sonal s]vice      
corporation 7z def9$ 9 section          
#ddh7;d77#b77 %all be equal to #ce p]c5t
 ( ! taxable income4  4  7b7 ,effective 
date ,! am5dm5t made by ?is section %all
 apply to taxable ye>s beg9n+ aft]      
,decemb] #ca1 #bjbd4  #c4 ,equalization 
( tax rates on dome/ic & =eign income   
7a7 ,9 g5]al ,section #ieb ( ! ,int]nal 

,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new subsection3  7e7  
,special application ( subp>t  7#a7 ,9  
g5]al ,= taxable ye>s beg9n+ aft]       
,decemb] #ca1 #bjbd1 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  7b7 ,treatm5t (         
previ\sly def]r$ =eign income  7#a7     
,treatm5t ( int]e/ ,section #ife7;h7 ( !
 ,int]nal ,rev5ue ,code ( #aihf is am5d$
 by add+ at ! end ! foll[+ new p>agraph3
  7#g7 ,rules relat+ to int]e/ ,9 ! case
 ( any am\nt ( ! net tax liability      
prorat$ to an in/allm5t "u ?is          
subsection :i* has n be5 paid be=e !    
date ( ! enactm5t ( ?is p>agraph1 ! la/ 
date prescrib$ = paym5t ( any su*       
in/allm5t = purposes ( section #ffja    
%all be ! e>li] ( su* la/ date 7det]m9$ 

)\t reg>d to ?is p>agraph7 or su* date (
 enactm5t4  4  7#b7 ,rules = ,s         
corporations ,section #ife7;i77#b77;,a7 
( su* ,code is am5d$ by add+ at ! end ! 
foll[+ new clause3  7iv7 ,! date ( !    
enactm5t ( ! ,corporate ,tax ,dodg+     
,prev5tion ,act4  4  7c7 ,effective date
 ,! am5dm5ts made by ?is section %all   
apply to taxable ye>s ( =eign           
corporations beg9n+ aft] ,decemb] #ca1  
#bjbd1 & to taxable ye>s ( ,unit$ ,/ates
 %>ehold]s 9 :i* or ) :i* su* taxable   
ye>s ( =eign corporations end4  #d4     
,c\ntry-by-c\ntry application (         
limitation on =eign tax cr$it bas$ on   
taxable units  7a7 ,9 g5]al ,section    
#ijd is am5d$ by ins]t+ aft] subsection 
7d7 ! foll[+ new subsection3  7e7       
,c\ntry-by-,c\ntry application ( section
 bas$ on taxable units  7#a7 ,9 g5]al ,!
 provisions ( subsections 7a71 7b71 7c71
 & 7d7 & sections #ijg & #ifj %all be   
appli$ sep>ately ) respect to ea* c\ntry
 & possession by tak+ into acc\nt !     
aggregate items prop]ly attributable or 

o!rwise allocable to a taxable unit ( ! 
taxpay] :i* is a tax resid5t ( su*      
c\ntry or possession4  7#b7 ,taxable    
units  7,a7 ,9 g5]al ,unless o!rwise    
provid$ by ! ,secret>y1 to ! ext5t an   
item may be prop]ly attributable or     
o!rwise allocable to m ?an "o taxable   
unit "u p>agraph 7#a71 su* item %all be 
treat$ z prop]ly attributable or o!rwise
 allocable to ! l[e/-ti] taxable unit ( 
! taxpay] to :i* su* item may be prop]ly
 attributable or o!rwise allocable4 ,no 
item %all be attributable or o!rwise    
allocable to m ?an "o taxable unit ( !  
taxpay]4  7,b7 ,det]m9ation ( taxable   
units ,except z o!rwise provid$ by !    
,secret>y1 ! taxable units ( a taxpay]  
are z foll[s3 7i7 ,9 g5]al ,! g5]al     
taxable unit ( ! taxpay] :i* is n       
o!rwise describ$ 9 a sep>ate clause (   
?is subp>agraph4  7ii7 ,=eign bran*es   
,ea* =eign bran* ! activities ( :i* are 
c>ri$ on directly or indirectly 7?r\gh  
"o or m pass-?r\gh entities7 by !       
taxpay]4  7iii7 ,controll$ =eign        

corporations ,ea* controll$ =eign       
corporation ) respect to :i* ! taxpay]  
is a ,unit$ ,/ates %>ehold]4  7iv7      
,bran*es ( controll$ =eign corporations 
,ea* bran* ! activities ( :i* are c>ri$ 
on directly or indirectly 7?r\gh "o or m
 pass-?r\gh entities7 by a controll$    
=eign corporation ref]r$ to 9 clause    
7iii74  7v7 ,int]e/s 9 pass-?r\gh       
entities  7,i7 ,9 g5]al ,ea* int]e/ 9 a 
pass-?r\gh entity held directly or      
indirectly by ! taxpay] or a controll$  
=eign corporation ref]r$ to 9 clause    
7iii7 if su* entity is a tax resid5t ( a
 =eign c\ntry4  7,,ii7 ,c]ta9 int]e/s   
held by controll$ =eign corporations    
,ea* int]e/ 9 a pass-?r\gh entity held  
directly or indirectly by a controll$   
=eign corporation ref]r$ to 9 clause    
7iii7 if su* entity is a tax resid5t ( a
 =eign c\ntry or su* entity is treat$ z 
a corporation 7or o!r entity t is n     
fiscally transp>5t7 = purposes ( ! tax  
law ( a =eign c\ntry 9 :i* su* controll$
 =eign corporation is a tax resid5t4    

7#c7 ,tax resid5t ,= purposes ( ?is     
subsection1 a taxable unit %all be      
treat$ z a tax resid5t ( a c\ntry or    
possession if su* taxable unit is liable
 to tax "u ! tax law ( su* c\ntry or    
possession z a resid5t4  7#d7           
,pass-?r\gh entity ,= purposes ( ?is    
subsection1 ! t]m pass-?r\gh entity     
means any p>tn]%ip & any o!r type (     
entity 7o!r ?an a corporation7 id5tifi$ 
by ! ,secret>y z a pass-?r\gh entity =  
purposes ( ?is subsection4  7#e7        
,regulations ,! ,secret>y %all issue su*
 regulations or o!r guidance z !        
,secret>y det]m9es necess>y or          
appropriate to c>ry out ! purposes ( ?is
 subsection1 includ+ regulations or o!r 
guidance-- 7,a7 = det]m9+ ! c\ntry or   
possession ) respect to :i* any taxable 
unit is a tax resid5t1 includ+-- 7i7    
det]m9+ su* c\ntry or possession on !   
basis ( location if su* taxable unit    
w\ld n o!rwise be a tax resid5t ( any   
c\ntry or possession1 &  7ii7 ensur+ t  
su* taxable unit is a tax resid5t ( n m 

?an #a c\ntry or possession1  7,b7      
apply+ ?is section to hybrid entities1  
passive =eign inve/m5t companies1 ti]$  
/ructures1 & bran*es1 includ+ bran*es t 
d n give rise to a taxable pres5ce "u ! 
tax law ( ! c\ntry :]e ! bran* is       
locat$1 &  7,c7 det]m9+ :e!r any entity 
is n fiscally transp>5t )9 ! mean+ (    
p>agraph 7#b77;,b77v77,,ii74  4  7b7    
,application ( =eign tax cr$it          
limitation ) respect to =eign bran*es   
,section #ijd7;d77#b77;,j77i7 is am5d$--
 7#a7 by /rik+ qualifi$ bus9ess units 7z
 def9$ 9 section #ihi7;a77 9 #a or m    
=eign c\ntries & ins]t+ =eign bran*es   
describ$ 9 section                      
#ijd7;e77#b77;,b77ii71 &  7#b7 by /rik+ 
a qualifi$ bus9ess unit & ins]t+ a =eign
 bran*4  7c7 ,effective date ,! am5dm5ts
 made by ?is section %all apply to      
taxable ye>s beg9n+ aft] ,decemb] #ca1  
#bjbd4  #e4 ,repeal ( *eck-!-box rules =
 c]ta9 =eign entities & ,,cfc look-?ru  
rules  7a7 ,*eck-!-,box rules ,p>agraph 
7#c7 ( section #ggja7;a7 ( ! ,int]nal   

,rev5ue ,code ( #aihf is am5d$-- 7#a7 by
 /rik+ &1 &  7#b7 by ins]t+ aft]        
insurance companies ! foll[+3 1 & any   
=eign bus9ess entity t has "o or m own]s
 all ( :i* h limit$ liability44  7b7    
,look-,?ru rule ,subp>agraph 7,c7 (     
section #ied7;c77#f7 ( su* ,code is     
am5d$ to read z foll[s3  7,c7 ,t]m9ation
 ,subp>agraph 7,a7 %all n apply to      
divid5ds1 int]e/1 r5ts1 & royalties     
receiv$ or accru$ aft] ! date ( !       
enactm5t ( ! ,corporate ,tax ,dodg+     
,prev5tion ,act4  4  7c7 ,effective date
 ,! am5dm5ts made by ?is section %all   
take effect on ! date ( ! enactm5t ( ?is
 ,act4  #f4 ,limitation on d$uction (   
int]e/ by dome/ic corporations :i* are  
memb]s ( an int]national f9ancial       
report+ gr\p  7a7 ,9 g5]al ,section #afc
 ( ! ,int]nal ,rev5ue ,code ( #aihf is  
am5d$ by r$esignat+ subsection 7n7 z    
subsection 7o7 & by ins]t+ aft]         
subsection 7m7 ! foll[+ new subsection3 
7n7 ,limitation on d$uction ( int]e/ by 
dome/ic corporations 9 int]national     

f9ancial report+ gr\ps  7#a7 ,9 g5]al ,9
 ! case ( any dome/ic corporation :i* is
 a memb] ( any int]national f9ancial    
report+ gr\p1 ! d$uction "u ?is *apt] = 
int]e/ paid or accru$ dur+ ! taxable ye>
 %all n exce$ ! sum (-- 7,a7 ! all[able 
p]c5tage ( #aje p]c5t ( ! excess 7if    
any7 (-- 7i7 ! am\nt ( su* int]e/ s paid
 or accru$1 ov]  7ii7 ! am\nt describ$ 9
 subp>agraph 7,b71 plus  7,b7 ! am\nt ( 
int]e/ includible 9 gross income ( su*  
corporation = su* taxable ye>4  7#b7    
,int]national f9ancial report+ gr\p     
7,a7 ,= purposes ( ?is subsection1 ! t]m
 int]national f9ancial report+ gr\p     
means1 ) respect to any report+ ye>1 any
 gr\p ( entities :i*-- 7i7 includes--   
7,i7 at lea/ "o =eign corporation engag$
 9 a trade or bus9ess )9 ! ,unit$       
,/ates1 or  7,,ii7 at lea/ "o dome/ic   
corporation & "o =eign corporation1     
7ii7 prep>es consolidat$ f9ancial       
/atem5ts ) respect to su* ye>1 &  7iii7 
reports 9 su* /atem5ts av]age annual    
gross receipts 7det]m9$ 9 ! aggregate ) 

respect to all entities :i* are "p ( su*
 gr\p7 = ! #c-report+-ye> p]iod end+ )  
su* report+ ye> 9 excess ( #be1jjj1jjj4 
7,b7 ,rules relat+ to det]m9ation (     
av]age gross receipts ,= purposes (     
subp>agraph 7,a77iii71 rules simil> to !
 rules ( section #ddh7;c77#c7 %all      
apply4  7#c7 ,all[able p]c5tage ,=      
purposes ( ?is subsection-- 7,a7 ,9     
g5]al ,! t]m all[able p]c5tage means1 ) 
respect to any dome/ic corporation = any
 taxable ye>1 ! ratio 7express$ z a     
p]c5tage & n great] ?an #ajj p]c5t7 (-- 
7i7 su* corporation's allocable %>e ( ! 
int]national f9ancial report+ gr\p's    
report$ net int]e/ exp5se = ! report+   
ye> ( su* gr\p :i* ends 9 or ) su*      
taxable ye> ( su* corporation1 ov]  7ii7
 su* corporation's report$ net int]e/   
exp5se = su* report+ ye> ( su* gr\p4    
7,b7 ,report$ net int]e/ exp5se ,! t]m  
report$ net int]e/ exp5se means-- 7i7 ) 
respect to any int]national f9ancial    
report+ gr\p = any report+ ye>1 ! excess
 (-- 7,i7 ! aggregate am\nt ( int]e/    

exp5se report$ 9 su* gr\p's consolidat$ 
f9ancial /atem5ts = su* taxable ye>1 ov]
  7,,ii7 ! aggregate am\nt ( int]e/     
income report$ 9 su* gr\p's consolidat$ 
f9ancial /atem5ts = su* taxable ye>1 &  
7ii7 ) respect to any dome/ic           
corporation = any report+ ye>1 ! excess 
(-- 7,i7 ! am\nt ( int]e/ exp5se ( su*  
corporation report$ 9 ! books & records 
( ! int]national f9ancial report+ gr\p  
:i* are us$ 9 prep>+ su* gr\p's         
consolidat$ f9ancial /atem5ts = su*     
taxable ye>1 ov]  7,,ii7 ! am\nt (      
int]e/ income ( su* corporation report$ 
9 su* books & records4  7,c7 ,allocable 
%>e ( report$ net int]e/ exp5se ,)      
respect to any dome/ic corporation :i*  
is a memb] ( any int]national f9ancial  
report+ gr\p1 su* corporation's         
allocable %>e ( su* gr\p's report$ net  
int]e/ exp5se = any report+ ye> is !    
portion ( su* exp5se :i* be>s ! same    
ratio to su* exp5se z-- 7i7 ! ,,ebitda (
 su* corporation = su* report+ ye>1 be>s
 to  7ii7 ! ,,ebitda ( su* gr\p = su*   

report+ ye>4  7,d7 ,,ebitda  7i7 ,9     
g5]al ,! t]m ,,ebitda means1 ) respect  
to any report+ ye>1 e>n+s be=e int]e/1  
taxes1 depreciation1 & amortization--   
7,i7 z det]m9$ 9 ! int]national f9ancial
 report+ gr\p's consolidat$ f9ancial    
/atem5ts = su* ye>1 or  7,,ii7 =        
purposes ( subp>agraph 7,a77i71 z       
det]m9$ 9 ! books & records ( !         
int]national f9ancial report+ gr\p :i*  
are us$ 9 prep>+ su* /atem5ts if n      
det]m9$ 9 su* /atem5ts4  7ii7 ,treatm5t 
( disreg>d$ entities ,! ,,ebitda ( any  
dome/ic corporation %all n fail to      
include ! ,,ebitda ( any entity :i* is  
disreg>d$ = purposes ( ?is *apt]4  7iii7
 ,treatm5t ( intra-gr\p di/ributions ,! 
,,ebitda ( any dome/ic corporation %all 
be det]m9$ )\t reg>d to any di/ribution 
receiv$ by su* corporation f any o!r    
memb] ( ! int]national f9ancial report+ 
gr\p4  7,e7 ,special rules =            
non-positive ,,ebitda  7i7 ,non-positive
 gr\p ,,ebitda ,9 ! case ( any          
int]national f9ancial report+ gr\p !    

,,ebitda ( :i* is z]o or less1 p>agraph 
7#a7 %all n apply to any memb] ( su*    
gr\p ! ,,ebitda ( :i* is above z]o4     
7ii7 ,non-positive entity ,,ebitda ,9 ! 
case ( any gr\p memb] ! ,,ebitda ( :i*  
is z]o or less1 p>agraph 7#a7 %all be   
appli$ )\t reg>d to subp>agraph 7,a7    
!re(4  7#d7 ,consolidat$ f9ancial       
/atem5t ,= purposes ( ?is subsection1 ! 
t]m consolidat$ f9ancial /atem5t means  
any consolidat$ f9ancial /atem5t        
describ$ 9 p>agraph 7#b77;,a77ii7 if su*
 /atem5t is-- 7,a7 a f9ancial /atem5t   
:i* is c]tifi$ z be+ prep>$ 9 accordance
 ) g5]ally accept$ acc\nt+ pr9ciples1   
int]national f9ancial report+ /&>ds1 or 
any o!r comp>able me?od ( acc\nt+       
id5tifi$ by ! ,secret>y1 & :i* is-- 7i7 
a #aj-,k 7or successor =m7 or annual    
/atem5t to %>ehold]s requir$ to be fil$ 
) ! ,unit$ ,/ates ,securities & ,ex*ange
 ,commission1  7ii7 an audit$ f9ancial  
/atem5t :i* is us$ =-- 7,i7 cr$it       
purposes1  7,,ii7 report+ to %>ehold]s1 
p>tn]s1 or o!r proprietors1 or to       

b5efici>ies1 or  7,,iii7 any o!r        
sub/antial nontax purpose1  b only if   
!re is no /atem5t describ$ 9 clause 7i71
 or  7iii7 fil$ ) any o!r ,f$]al or     
,/ate ag5cy = nontax purposes1 b only if
 !re is no /atem5t describ$ 9 clause 7i7
 or 7ii71 or  7,b7 a f9ancial /atem5t   
:i*-- 7i7 is us$ = a purpose describ$ 9 
subclause 7,i71 7,,ii71 or 7,,iii7 (    
subp>agraph 7,a77ii71 or  7ii7 fil$ )   
any regulatory or gov]nm5tal body 7:e!r 
dome/ic or =eign7 specifi$ by !         
,secret>y1  b only if !re is no /atem5t 
describ$ 9 subp>agraph 7,a74  7#e7      
,report+ ye> ,= purposes ( ?is          
subsection1 ! t]m report+ ye> means1 )  
respect to any int]national f9ancial    
report+ gr\p1 ! ye> ) respect to :i* !  
consolidat$ f9ancial /atem5ts are       
prep>$4  7#f7 ,application to c]ta9     
entities  7,a7 ,p>tn]%ips ,! secret>y   
%all prescribe rules = application ( ?is
 subsection to any p>tn]%ip :i* is a    
memb] ( any int]national f9ancial       
report+ gr\p4 ,su* rules %all treat any 

su* p>tn]%ip 9 a mann] simil> to ! way  
su* p>tn]%ip w\ld be treat$ "u ?is      
subsection if x 7 a dome/ic corporation 
:i* is a memb] ( any int]national       
f9ancial report+ gr\p4  7,b7 ,=eign     
corporations engag$ 9 trade or bus9ess  
)9 ! ,unit$ ,/ates ,except z o!rwise    
provid$ by ! ,secret>y 9 p>agraph 7#g71 
any d$uction = int]e/ paid or accru$ by 
a =eign corporation engag$ 9 a trade or 
bus9ess )9 ! ,unit$ ,/ates %all be      
limit$ 9 a mann] consi/5t ) ! pr9ciples 
( ?is subsection4  7,c7 ,consolidat$    
gr\ps ,= purposes ( ?is subsection1 !   
memb]s ( any gr\p t file 7or are requir$
 to file7 a consolidat$ return ) respect
 to ! tax impos$ by *apt] #a = a taxable
 ye> %all be treat$ z a s+le            
corporation4  7#g7 ,regulations ,!      
,secret>y may issue su* regulations or  
o!r guidance z are necess>y or          
appropriate to c>ry out ! purposes ( ?is
 subsection4  4  7b7 ,effective date ,! 
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ! date ( !  

enactm5t ( ?is ,act4  #g4 ,modifications
 to rules relat+ to inv]t$ corporations 
7a7 ,9 g5]al ,subsection 7b7 ( section  
#ghgd ( ! ,int]nal ,rev5ue ,code ( #aihf
 is am5d$ to read z foll[s3  7b7 ,inv]t$
 corporations treat$ z dome/ic          
corporations  7#a7 ,9 g5]al ,not)/&+    
section #ggja7;a77#d71 a =eign          
corporation %all be treat$ = purposes ( 
?is title z a dome/ic corporation if--  
7,a7 su* corporation w\ld be a surrogate
 =eign corporation if subsection 7a77#b7
 7 appli$ by sub/itut+ #hj p]c5t = #fj  
p]c5t1 or  7,b7 su* corporation is an   
inv]t$ dome/ic corporation4  7#b7       
,inv]t$ dome/ic corporation ,= purposes 
( ?is subsection1 a =eign corporation   
%all be treat$ z an inv]t$ dome/ic      
corporation if1 pursuant to a plan 7or a
 s]ies ( relat$ transactions7-- 7,a7 !  
entity completes aft] ,may #h1 #bjad1 ! 
direct or indirect acquisition (-- 7i7  
sub/antially all ( ! prop]ties held     
directly or indirectly by a dome/ic     
corporation1 or  7ii7 sub/antially all (

 ! assets (1 or sub/antially all ( !    
prop]ties con/itut+ a trade or bus9ess  
(1 a dome/ic p>tn]%ip1 &  7,b7 aft] !   
acquisition1 m ?an #ej p]c5t ( ! /ock   
7by vote or value7 ( ! entity is held-- 
7i7 9 ! case ( an acquisition ) respect 
to a dome/ic corporation1 by =m]        
%>ehold]s ( ! dome/ic corporation by    
reason ( hold+ /ock 9 ! dome/ic         
corporation1 or  7ii7 9 ! case ( an     
acquisition ) respect to a dome/ic      
p>tn]%ip1 by =m] p>tn]s ( ! dome/ic     
p>tn]%ip by reason ( hold+ a capital or 
pr(its int]e/ 9 ! dome/ic p>tn]%ip4     
7#c7 ,exception = corporations )        
sub/antial bus9ess activities 9 =eign   
c\ntry ( organization ,a =eign          
corporation describ$ 9 p>agraph 7#b7    
%all n be treat$ z an inv]t$ dome/ic    
corporation if aft] ! acquisition !     
exp&$ affiliat$ gr\p :i* includes !     
entity has sub/antial bus9ess activities
 9 ! =eign c\ntry 9 :i* or "u ! law (   
:i* ! entity is creat$ or organiz$ :5   
comp>$ to ! total bus9ess activities (  

su* exp&$ affiliat$ gr\p4 ,= purposes ( 
subsection 7a77#b77;,b77iii7 & ! prec$+ 
s5t5ce1 ! t]m sub/antial bus9ess        
activities %all h ! mean+ giv5 su* t]m  
"u regulations 9 effect on ,may #h1     
#bjad1 except t ! ,secret>y may issue   
regulations increas+ ! ?re%old p]c5t 9  
any ( ! te/s "u su* regulations =       
det]m9+ if bus9ess activities con/itute 
sub/antial bus9ess activities = purposes
 ( ?is p>agraph4  4  7b7 ,con=m+        
am5dm5ts  7#a7 ,clause 7i7 ( section    
#ghgd7;a77#b77;,b7 ( ! ,int]nal ,rev5ue 
,code ( #aihf is am5d$ by /rik+ aft]    
,m>* #d1 #bjjc1 & ins]t+ aft] ,m>* #d1  
#bjjc1 & be=e ,may #i1 #bjad14  7#b7    
,subsection 7c7 ( section #ghgd ( su*   
,code is am5d$-- 7,a7 9 p>agraph 7#b7-- 
7i7 by /rik+ subsection 7a77#b77;,b77ii7
 & ins]t+ subsections 7a77#b77;,b77ii7 &
 7b77#b77;,b71 &  7ii7 by ins]t+ or     
7b77#b77;,a7 aft] 7a77#b77;,b77i7 9     
subp>agraph 7,b71  7,b7 9 p>agraph 7#c71
 by ins]t+ or 7b77#b77;,b71 z ! case may
 be1 aft] 7a77#b77;,b77ii71  7,c7 9     

p>agraph 7#e71 by /rik+ subsection      
7a77#b77;,b77ii7 & ins]t+ subsections   
7a77#b77;,b77ii7 & 7b77#b77;,b71 &  7,d7
 9 p>agraph 7#f71 by ins]t+ or inv]t$   
dome/ic corporation1 z ! case may be1   
aft] surrogate =eign corporation4  7c7  
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s end+ 
aft] ,may #h1 #bjad4  #h4 ,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 ,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 ( assets 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    
#i4 ,modifications to base erosion &    
anti-abuse tax  7a7 ,accel]ation (      
modifications ,section #ei;,a7b7 ( !    
,int]nal ,rev5ue ,code ( #aihf is       
am5d$-- 7#a7 9 p>agraph 7#a77;,a71 by   
/rik+ #aj p]c5t 7#e p]c5t 9 ! case (    

taxable ye>s beg9n+ 9 cal5d> ye> #bjah7 
& ins]t+ #ab4e p]c5t1  7#b7 9 p>agraph  
7#a77;,b71 by /rik+ by ! excess ( & all 
t foll[s & ins]t+ by ! aggregate am\nt (
 ! cr$its all[$ "u ?is *apt] aga9/ su*  
regul> tax liability41  7#c7 by /rik+   
p>agraphs 7#b7 & 7#d7 & r$esignat+      
p>agraph 7#c7 z p>agraph 7#b71 &  7#d7 9
 p>agraph 7#b77;,a7 7z s r$esignat$71 by
 /rik+ p>agraphs 7#a77;,a7 & 7#b77;,a7  
%all ea* & ins]t+ p>agraph 7#a77;,a7    
%all4  7b7 ,modifications to def9ition (
 applicable taxpay] ,section            
#ei;,a7e77#a7 ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$-- 7#a7 by /rik+       
#ejj1jjj1jjj 9 subp>agraph 7,b7 & ins]t+
 #be1jjj1jjj1 &  7#b7 by ins]t+ & at !  
end ( subp>agraph 7,a71 by /rik+ 1 & at 
! end ( subp>agraph 7,b7 & ins]t+ a     
p]iod1 & by /rik+ subp>agraph 7,c74  7c7
 ,exceptions to def9ition ( base erosion
 paym5t ,section #ei;,a7d7 ( ! ,int]nal 
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new p>agraph3  7#f7   
,exception = c]ta9 paym5ts includible 9 

gross income ( payee  7,a7 ,9 g5]al     
,p>agraph 7#a7 %all n apply to any      
portion ( an am\nt-- 7i7 :i* is paid or 
accru$ by ! taxpay] to a =eign p]son :o 
is a memb] ( ! same controll$ gr\p (    
corporations z ! taxpay]1 &  7ii7 :i*-- 
7,i7 is treat$ by ! =eign p]son z an    
am\nt ( income f s\rces )9 ! ,unit$     
,/ates :i* is effectively connect$ ) !  
conduct by su* p]son ( a trade or       
bus9ess )9 ! ,unit$ ,/ates1 or  7,,ii7  
if ! =eign p]son is a controll$ =eign   
corporation1 is includ$ 9 ! income ( a  
,unit$ ,/ates %>ehold] ( su* controll$  
=eign corporation "u section #iea7;a74  
7,b7 ,controll$ gr\p ( corporations ,=  
purposes ( ?is p>agraph1 ! t]m controll$
 gr\p ( corporations has ! same mean+   
giv5 to su* t]m by section #aefc7;a71   
except t-- 7i7 m ?an #ej p]c5t %all be  
sub/itut$ = at lea/ #hj p]c5t ea* place 
x appe>s 9 section #aefc7;a77#a71 &     
7ii7 ! det]m9ation %all be made )\t     
reg>d to subsections 7a77#d71           
7b77#b77;,c71 & 7e77#c77;,c7 ( section  

#aefc4  4  7d7 ,effective date ,!       
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ 9 cal5d> ye>s    
beg9n+ aft] ! date ( ! enactm5t ( ?is   
,act4  #aj4 ,modifications ( =eign tax  
cr$it rules applicable to oil1 gas1 m9+1
 gambl+ & o!r indu/ry taxpay]s receiv+  
specific economic b5efits  7a7 ,9 g5]al 
,section #ija ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$ by r$esignat+         
subsection 7n7 z subsection 7o7 & by    
ins]t+ aft] subsection 7m7 ! foll[+ new 
subsection3  7n7 ,special rules relat+  
to dual capacity taxpay]s  7#a7 ,g5]al  
rule ,not)/&+ any o!r provision ( ?is   
*apt]1 any am\nt paid or accru$ by a    
dual capacity taxpay] 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
  4  7b7 ,effective date ,! am5dm5ts    
made by ?is section %all apply to taxes 
paid or accru$ 9 taxable ye>s beg9n+    
aft] ! date ( ! enactm5t ( ?is ,act4    
7c7 ,special rule = treaties ,not)/&+   
sections #hid or #gheb7;d7 ( ! ,int]nal 
,rev5ue ,code ( #aihf1 ! am5dm5ts made  
by ?is section %all apply )\t reg>d to  
any treaty obligation ( ! ,unit$ ,/ates4
  #aa4 ,limitations on treaty b5efits   
7a7 ,limitation = c]ta9 d$uctible       
paym5ts ,section #hid ( ! ,int]nal      
,rev5ue ,code ( #aihf is am5d$ by add+  
at ! end ! foll[+ new subsection3  7d7  
,limitation on treaty b5efits = c]ta9   
d$uctible paym5ts  7#a7 ,9 g5]al ,9 !   
case ( any d$uctible relat$-p>ty paym5t1

 any )hold+ tax impos$ "u *apt] #c 7&   
any tax impos$ "u subp>t ,a or ,b ( ?is 
"p7 ) respect to su* paym5t may n be    
r$uc$ "u any treaty ( ! ,unit$ ,/ates   
unless any su* )hold+ tax w\ld be r$uc$ 
"u a treaty ( ! ,unit$ ,/ates if su*    
paym5t 7 made directly to ! =eign p>5t  
corporation4  7#b7 ,d$uctible           
relat$-p>ty paym5t ,= purposes ( ?is    
subsection1 ! t]m d$uctible relat$-p>ty 
paym5t means any paym5t made1 directly  
or indirectly1 by any p]son to any o!r  
p]son if ! paym5t is all[able z a       
d$uction "u ?is *apt] & bo? p]sons are  
memb]s ( ! same =eign controll$ gr\p (  
entities4  7#c7 ,=eign controll$ gr\p ( 
entities ,= purposes ( ?is subsection-- 
7,a7 ,9 g5]al ,! t]m =eign controll$    
gr\p ( entities means a controll$ gr\p (
 entities ! common p>5t ( :i* is a =eign
 corporation4  7,b7 ,controll$ gr\p (   
entities ,! t]m controll$ gr\p (        
entities means a controll$ gr\p (       
corporations z def9$ 9 section          
#aefc7;a77#a71 except t-- 7i7 m ?an #ej 

p]c5t %all be sub/itut$ = at lea/ #hj   
p]c5t ea* place x appe>s !re91 &  7ii7 !
 det]m9ation %all be made )\t reg>d to  
subsections 7a77#d7 & 7b77#b7 ( section 
#aefc4  ,a p>tn]%ip or any o!r entity   
7o!r ?an a corporation7 %all be treat$ z
 a memb] ( a controll$ gr\p ( entities  
if su* entity is controll$ 7)9 ! mean+ (
 section #ied7;d77#c77 by memb]s ( su*  
gr\p 7includ+ any entity treat$ z a     
memb] ( su* gr\p by reason ( ?is        
s5t5ce74  7#d7 ,=eign p>5t corporation  
,= purposes ( ?is subsection1 ! t]m     
=eign p>5t corporation means1 ) respect 
to any d$uctible relat$-p>ty paym5t1 !  
common p>5t ( ! =eign controll$ gr\p (  
entities ref]r$ to 9 p>agraph 7#c77;,a74
  7#e7 ,regulations ,! ,secret>y may    
prescribe su* regulations or o!r        
guidance z are necess>y or appropriate  
to c>ry out ! purposes ( ?is subsection1
 includ+ regulations or o!r guidance :i*
 provide =-- 7,a7 ! treatm5t ( two or m 
p]sons z memb]s ( a =eign controll$ gr\p
 ( entities if su* p]sons w\ld be !     

common p>5t ( su* gr\p if treat$ z "o   
corporation1 &  7,b7 ! treatm5t ( any   
memb] ( a =eign controll$ gr\p (        
entities z ! common p>5t ( su* gr\p if  
su* treatm5t is appropriate tak+ into   
acc\nt ! economic relation%ips among su*
 entities4  4  7b7 ,limitation = c]ta9  
income attributable to p]man5t          
e/abli%m5ts 9 a ?ird c\ntry ,section    
#hid ( su* ,code1 z am5d$ by subsection 
7a71 is am5d$ by add+ at ! end ! foll[+ 
new subsection3  7e7 ,d5ial ( treaty    
b5efits ) respect to c]ta9 income       
attributable to a p]man5t e/abli%m5t 9 a
 ?ird c\ntry ,a =eign p]son %all n be   
entitl$ "u any income tax treaty ( !    
,unit$ ,/ates ) a =eign c\ntry to any   
exemption f1 or r$uction (1 any tax )   
respect to income if-- 7#a7 su* income  
is income f s\rces )9 ! ,unit$ ,/ates1 &
  7#b7 su* income is attributable to a  
p]man5t e/abli%m5t :i* is outside ( su* 
=eign c\ntry &-- 7,a7 ! pr(its ( :i* are
 subject to a comb9$ aggregate effective
 rate ( tax 9 su* =eign c\ntry & !      

c\ntry ( ! p]man5t e/abli%m5t t is less 
?an ! less] (-- 7i7 #ae p]c5t1 or  7ii7 
#fj p]c5t ( ! g5]al /atutory rate ( tax 
on income on corporations 9 su* =eign   
c\ntry1 or  7,b7 :i* is locat$ 9 a =eign
 c\ntry ) :i* ! ,unit$ ,/ates does n h  
an income tax treaty & is n tax$ by !   
=eign c\ntry :i* is a p>ty to ! treaty4 
4  7c7 ,effective date ,! am5dm5ts made 
by ?is section %all apply to paym5ts    
made aft] ! date ( ! enactm5t ( ?is     
,act4  7d7 ,special rule = treaties     
,not)/&+ sections #hid or #gheb7;d7 ( ! 
,int]nal ,rev5ue ,code ( #aihf1 !       
am5dm5ts made by ?is section %all apply 
)\t reg>d to any treaty obligation ( !  
,unit$ ,/ates4  #ab4 ,repeal ( d$uction 
= =eign-d]iv$ intangible income  7a7 ,9 
g5]al ,"p ,,viii ( sub*apt] ,b ( *apt]  
#a ( ! ,int]nal ,rev5ue ,code ( #aihf is
 am5d$ by /rik+ section #bej 7& ! item  
relat$ to su* section 9 ! table (       
sections = su* "p74  7b7 ,con=m+        
am5dm5ts  7#a7 ,section #agb7;d7 ( !    
,int]nal ,rev5ue ,code ( #aihf is am5d$ 

by /rik+ p>agraph 7#i74  7#b7 ,section  
#bdf7;b7 ( su* ,code is am5d$-- 7,a7 by 
/rik+ ! comma aft] section #bdc7;a77#a7 
! fir/ place x appe>s & ins]t+ & & by   
/rik+ & section #bej1 &  7,b7 by ins]t+ 
& aft] section #bdc7;a77#a7 ! second    
place x appe>s & by /rik+ 1 & #bej4  7c7
 ,effective date ,! am5dm5ts made by ?is
 section %all apply to taxable ye>s     
beg9n+ aft] ,decemb] #ca1 #bjbd4