,i  #aai? ,,congress  #b;d ,session  ,h4
 ,r4 #ajdca  ,,9 ,,! ,,h\se ,,(         
,,repres5tatives  ,septemb] #af1        
#bjbf,mr4 ,e/es introduc$ ! foll[+ bill2
 :i* 0 ref]r$ to ! ,committee on ,ways &
 ,means  ,a ,,bill  ,to am5d ! ,int]nal 
,rev5ue ,code ( #aihf to modify c]ta9   
provisions relat+ to ! taxation (       
int]national entities4  #a4 ,%ort title1
 etc  7a7 ,%ort title ,?is ,act may be  
cit$ z ! ,u4,s4 ,innovation & ,global   
,competitiv5ess ,act ( #bjbf4  7b7      
,am5dm5t ( #aihf code ,except z o!rwise 
expressly provid$1 :5ev] 9 ?is ,act an  
am5dm5t or repeal is express$ 9 t]ms (  
an am5dm5t to1 or repeal (1 a section or
 o!r provision1 ! ref]5ce %all be       
consid]$ to be made to a section or o!r 
provision ( ! ,int]nal ,rev5ue ,code (  
#aihf4  7c7 ,table ( cont5ts ,! table ( 
cont5ts = ?is ,act is z foll[s3 ,sec4   
#a4 ,%ort title1 etc4 ,sec4 #b4         
,modification ( d$uction = =eign-d]iv$  
intangible income & net controll$ =eign 
corporation te/$ income4 ,sec4 #c4      

,modifications to base erosion m9imum   
tax4 ,sec4 #d4 ,modification ( =eign tax
 cr$it limitation baskets4 ,sec4 #e4    
,c>ryov] ( net ,,cfc te/$ loss4 ,sec4   
#f4 ,r$et]m9ation ( =eign taxes & relat$
 claims4 ,sec4 #g4 ,repeal ( =eign tax  
cr$it haircut = net controll$ =eign     
corporation te/$ income4 ,sec4 #h4      
,repeal ( inclusion p]c5tage applicable 
to deem$ paid cr$it = taxes prop]ly     
attributable to te/$ income4 ,sec4 #i4  
,application ( =eign-s\rce divid5d      
d$uction to am\nts receiv$ by controll$ 
=eign corporations4 ,sec4 #aj4          
,elim9ation ( inclusion ( =eign base    
company sales income & =eign base       
company s]vices income4 ,sec4 #aa4      
,corporations exempt f subp>t ,f        
inclusion = inve/m5t 9 ,unit$ ,/ates    
prop]ty4 ,sec4 #ab4 ,special rules =    
transf]s ( intangible prop]ty f         
controll$ =eign corporations to ,unit$  
,/ates %>ehold]s4 ,sec4 #ac4 ,net ,,cfc 
te/$ income det]m9$ )\t reg>d to c]ta9  
income d]iv$ f s]vices p]=m$ 9 ! ,unit$ 

,/ates ,virg9 ,isl&s4 ,sec4 #ad4 ,repeal
 ( modification to def9ition ( adju/$   
taxable income = purposes ( ! limitation
 on bus9ess int]e/4 ,sec4 #ae4 ,rese>*  
cr$it treat$ z a specifi$ cr$it = all   
taxpay]s = purposes ( g5]al bus9ess     
cr$it4 ,sec4 #af4 ,regulations to prev5t
 duplicative *>ges to capital acc\nt =  
c]ta9 rese>* & developm5t exp5ditures4  
#b4 ,modification ( d$uction =          
=eign-d]iv$ intangible income & net     
controll$ =eign corporation te/$ income 
7a7 ,increase 9 d$uction ,section       
#bej7;a77#a77;,a7 is am5d$ by /rik+     
#cc4cd p]c5t & ins]t+ #dj p]c5t4  7b7   
,d$uction n ,to apply aga9/ divid5ds    
receiv$ d$uction limitation  ,section   
#bdf7;b77#a7 is am5d$ by /rik+          
subsection 7a7 & 7b7 ( section #bde1 &  
section #bej ! fir/ place x appe>s &    
ins]t+ & subsections 7a7 & 7b7 ( section
 #bde4  7c7 ,d$uction tak5 into acc\nt 9
 det]m9+ net op]at+ loss d$uction       
,section #agb7;d7 is am5d$ by /rik+     
p>agraph 7#i74  7d7 ,look-,?r\gh =      

int]e/ paym5ts ,section #bej7;b77#b7 is 
am5d$ by add+ at ! end ! foll[+ new     
subp>agraph3  7,f7  ,int]e/ paid by     
controll$ =eign corporation             
,=eign-d]iv$ d$uction eligible income   
%all include int]e/ paid by a controll$ 
=eign corporation to a corporation t is 
a ,unit$ ,/ates %>ehold] ) respect to   
su* =eign corporation if su* controll$  
=eign corporation is relat$ 7)9 ! mean+ 
( section #ied7;d77 to su* ,unit$ ,/ates
 %>ehold] & su* int]e/ is an am\nt :i*  
is describ$ 9 section                   
#iea;,a7c77#b77;,a77ii7 ) respect to su*
 controll$ =eign corporation4 ,to !     
ext5t provid$ by ! ,secret>y 9          
regulations1 ! prec$+ s5t5ce %all n     
apply to int]e/ paid by a controll$     
=eign corporation to a relat$ ,unit$    
,/ates %>ehold] if su* int]e/ is        
directly relat$ to int]e/ exp5se ( su*  
%>ehold] 7or ano!r relat$ p]son74  4    
7e7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s  
beg9n+ aft] ,decemb] #ca1 #bjbf4  #c4   

,modifications to base erosion m9imum   
tax  7a7 ,base erosion m9imum tax am\nt 
det]m9$ )\t reg>d to cr$its ,section    
#ei;,a7b77#a77;,b7 is am5d$ to read z   
foll[s3  7,b7 an am\nt equal to ! regul>
 tax liability 7z def9$ 9 section       
#bf7;b77 ( ! taxpay] = ! taxable ye>4  4
  7b7 ,application ( g5]al bus9ess cr$it
 aga9/ ,,beat ,! second s5t5ce ( section
 #ch7;c77#a7 is am5d$ by /rik+ & ! tax  
impos$ by section #ee & ins]t+ 1 ! tax  
impos$ by section #ee1 & ! tax impos$ by
 section #ei;,a4  7c7  ,expansion &     
consolidation ( rules ,to exempt c]ta9  
paym5ts f treatm5t z base erosion       
paym5ts  7#a7  ,9 g5]al  ,section #ei;,a
 is am5d$ by r$esignat+ subsection 7i7 z
 subsection 7j7 & by ins]t+ aft]        
subsection 7h7 ! foll[+ new subsection3 
7i7  ,c]ta9 paym5ts n treat$ z base     
erosion paym5ts  7#a7  ,exception =     
paym5ts on :i* tax is impos$  7,a7  ,9  
g5]al  ,an am\nt %all n be treat$ z a   
base erosion paym5t if-- 7i7 su* am\nt  
7or any portion !re(7 is includible 9 ! 

gross income ( any taxpay] by reason (--
  7,i7 section #iea7;a71  7,,ii7 section
 #iea;,a7a71  7,,iii7 section #hga7;b71 
or  7,,iv7 section #hhb7;a71 or  7ii7 ! 
,secret>y det]m9es su* am\nt is o!rwise 
subject to suffici5t tax "u ?is *apt]   
7o!r ?an by ?is section74  7,b7         
,treatm5t ( c]ta9 d$uctions  ,= purposes
 ( subp>agraph 7,a71 tax %all be treat$ 
z impos$ by ?is *apt] )\t reg>d to any  
d$uction all[$ "u "p ,,viii ( sub*apt]  
,b4  7,c7  ,application ( c]ta9 rules   
,! am\nt n treat$ z a base erosion      
paym5t by reason ( ?is p>agraph %all be 
det]m9$ "u rules simil> to ! rules (    
section #afc7;j77#e7 7z 9 effect be=e ! 
date ( ! enactm5t ( ,public ,law        
#aae-ig74  7#b7  ,exception = c]ta9     
paym5ts subject to suffici5t =eign tax  
7,a7  ,9 g5]al  ,an am\nt %all n be     
treat$ z a base erosion paym5t if !     
taxpay] e/abli%es to ! satisfaction ( ! 
,secret>y t su* am\nt 0 made to a =eign 
p]son :i* is a relat$ p>ty ( ! taxpay] t
 is subject to an effective rate ( =eign

 income tax 7z def9$ 9 section          
#ied7;b77#d77 :i* is n less ?an #ah4i   
p]c5t4  7,b7  ,c]ta9 paym5ts to relat$  
p>ties  ,to ! ext5t provid$ by !        
,secret>y 9 regulations1 an am\nt paid  
to a =eign p]son :i* is a relat$ p>ty ( 
! taxpay] %all be treat$ z paid to ano!r
 =eign p]son :i* is a relat$ p>ty ( !   
taxpay] if su* second =eign p]son is    
subject to an effective rate ( =eign    
income tax 7z def9$ 9 section           
#ied7;b77#d77 :i* is less ?an #ah4i     
p]c5t1 to ! ext5t ! am\nt s paid        
directly or indirectly funds a paym5t to
 su* second =eign p]son4  7#c7  ,c]ta9  
paym5ts to ,exclusion = corporations    
locat$ 9 a jurisdiction ) a             
discrim9atory tax  7,a7  ,9 g5]al       
,p>agraph 7#b7 %all n apply to any      
paym5t made dur+ any cal5d> ye> if !    
paym5t is made to a relat$ p>ty 7z def9$
 9 section #ei;,a7g77#a77--  7i7 t is a 
tax resid5t ( a jurisdiction :i* imposes
 a discrim9atory tax on a dome/ic       
corporation at any "t dur+ su* cal5d>   

ye>1 or  7ii7 if any #be-p]c5t own] 7z  
def9$ 9 section #ei;,a7g77#b77 ( su*    
relat$ p>ty is a tax resid5t 9 a        
jurisdiction :i* imposes a discrim9atory
 tax on any dome/ic corporation at any  
"t dur+ su* cal5d> ye>4  7,b7           
,discrim9atory tax  7i7  ,9 g5]al  ,!   
t]m discrim9atory tax means--  7,i7 any 
digital s]vices tax1  7,,ii7 to ! ext5t 
provid$ by ! ,secret>y1 any tax impos$  
by a =eign c\ntry if--  7aa7 su* tax    
applies m ?an incid5tally to items (    
income t w\ld n be consid]$ to be f     
s\rces1 or effectively connect$ to a    
trade or bus9ess1 )9 ! =eign c\ntry "u !
 rules ( "p ,i ( ?is sub*apt] if su* "p 
7 appli$ by treat+ su* =eign c\ntry z   
?\gh x 7 ! ,unit$ ,/ates1  7bb7 su* tax 
is impos$ on a base o!r ?an net income &
 is n comput$ by p]mitt+ recov]y ( co/s 
& exp5ses1  7cc7 su* tax is exclusively 
or pr$om9antly applicable1 9 practice or
 by its t]ms1 to nonresid5t individuals 
& =eign corporations or p>tn]%ips       
7det]m9$ "u rules simil> to p>agraphs   

7#d7 & 7#e7 ( section #ggja7;a7 by      
treat+ ! =eign c\ntry z ?\gh x 7 !      
,unit$ ,/ates7 because ( ! application (
 rev5ue ?re%olds1 exemptions1 or        
exclusions = taxpay]s subject to su*    
=eign c\ntry's corporate income tax1 or 
7dd7 su* tax is n treat$ z an income tax
 "u ! laws ( su* =eign c\ntry or is     
o!rwise treat$ by su* =eign c\ntry z    
outside ! scope ( any agreem5ts t are 9 
=ce betwe5 su* =eign c\ntry & "o or m   
o!r jurisdictions = ! avoidance ( d\ble 
taxation ) respect to taxes on income1  
or  7,,iii7 to ! ext5t provid$ by !     
,secret>y1 any o!r tax impos$ by a =eign
 c\ntry enact$ ) a public or /at$       
purpose indicat+ t ! tax w be           
economically borne1 directly or         
indirectly1 disproportionately by ,unit$
 ,/ates p]sons4  7ii7  ,exceptions  ,su*
 t]m %all n include1 except z o!rwise   
provid$ by ! ,secret>y1 any tax :i* is a
 g5]ally applicable tax :i* is--  7,i7  
an income tax g5]ally impos$ on ! income
 ( citiz5s or resid5ts ( ! =eign c\ntry1

 ev5 if ! computation ( income includes 
paym5ts t w\ld be =eign s\rce income "u 
"p ,i ( ?is sub*apt]1  7,,ii7 an income 
tax :i* w\ld be a discrim9atory tax     
7det]m9$ )\t reg>d to ?is clause7 solely
 because x is impos$ on ! income (      
nonresid5ts attributable to a trade or  
bus9ess 9 su* =eign c\ntry1  7,,iii7 an 
income tax :i* w\ld be a discrim9atory  
tax 7det]m9$ )\t reg>d to ?is clause7   
solely because x is impos$ on citiz5s or
 resid5ts ( su* =eign c\ntry by ref]5ce 
to ! income ( a corporate subsidi>y (   
su* p]son1  7,,iv7 a )hold+ tax1 or o!r 
gross basis tax1 on any am\nt describ$ 9
 section #hga7;a77#a7 or #hha7;a71 o!r  
?an any )hold+ tax1 or o!r gross basis  
tax1 impos$ ) respect to s]vices p]=m$  
by p]sons o!r ?an individuals1  7,v7 a  
value add$ tax1 goods & s]vices tax1    
sales tax1 or o!r simil> tax on         
consumption1  7,,vi7 a tax impos$ )     
respect to transactions on a p]-unit or 
p]-transaction basis r ?an on an ad     
valorem basis1  7,,vii7 a tax on real or

 p]sonal prop]ty1 an e/ate tax1 a gift  
tax1 o!r simil> tax1  7,,viii7 a tax :i*
 w\ld n be an extrat]ritorial tax or    
discrim9atory tax 7det]m9$ )\t reg>d to 
?is clause7 except by reason (          
consolidation or loss %>+ rules t       
g5]ally apply only ) respect to income (
 tax resid5ts ( ! =eign c\ntry1 or      
7,,ix7 any o!r tax id5tifi$ by !        
,secret>y = purposes ( ?is p>agraph4    
7,c7  ,det]m9ation on basis ( applicable
 f9ancial /atem5ts  ,except z o!rwise   
provid$ by ! ,secret>y "u subp>agraph   
7,d71 ! effective rate ( =eign income   
tax ) respect to any am\nt may be       
e/abli%$ on ! basis ( applicable        
f9ancial /atem5ts 7z def9$ 9 section    
#dea7;b77#c774  7,d7  ,regulations  ,!  
,secret>y %all issue su* regulations or 
o!r guidance z may be necess>y or       
appropriate to c>ry out ! purposes ( ?is
 p>agraph1 includ+ regulations or o!r   
guidance provid+ proc$ures = det]m9+ !  
effective rate ( =eign income tax to :i*
 any am\nt is subject4 ,su* proc$ures   

may require t any transaction or s]ies (
 transactions among multiple p>ties be  
re*>act]iz$ z "o or m transactions      
directly among any #b or m ( su* p>ties 
:]e ! ,secret>y det]m9es t su*          
re*>act]ization is appropriate to c>ry  
out1 or prev5t avoidance (1 ! purposes (
 ?is section4  7#d7  ,exception = c]ta9 
am\nts ) respect to s]vices             
,subsections 7d77#a7 & 7d77#b7 %all n   
apply to s mu* ( any am\nt paid or      
accru$ by a taxpay] = s]vices z does n  
exce$ ! total s]vices co/ ( su* s]vices4
 ,! prec$+ s5t5ce %all n apply unless   
su* s]vices meet ! requirem5ts =        
eligibility = use ( ! s]vices co/ me?od 
"u section #dhb 7det]m9$ )\t reg>d to ! 
requirem5t t ! s]vices n contribute     
significantly to fundam5tal risks (     
bus9ess success or failure74  4  7#b7   
,con=m+ am5dm5t  ,section #ei;,a7d7 is  
am5d$ by /rik+ p>agraph 7#e74  7d7      
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] ,decemb] #ca1 #bjbf4  #d4   

,modification ( =eign tax cr$it         
limitation baskets  7a7 ,modification ( 
=eign tax cr$it limitation baskets  7#a7
 ,9 g5]al ,section #ijd7;d77#a7 is am5d$
 by /rik+ subp>agraphs 7,a7 & 7,b7 & by 
r$esignat+ subp>agraphs 7,c7 & 7,d7 z   
subp>agraphs 7,a7 & 7,b71 respectively4 
7#b7 ,con=m+ am5dm5ts  7,a7 ,section    
#ijd7;d77#b77;,a77ii7 is am5d$ by /rik+ 
income describ$ 9 p>agraph 7#a77;,a71   
=eign bran* income1 &4  7,b7 ,section   
#ijd7;c7 is am5d$ by /rik+ ! la/ s5t5ce4
  7,c7 ,section #ijd7;d77#b7 is am5d$ by
 /rik+ subp>agraph 7,j7 & by r$esignat+ 
subp>agraph 7,k7 z subp>agraph 7,j74    
7,d7 ,section #bej7;b77#c77;,a77i77,,vi7
 is am5d$ to read z foll[s3  7,,vi7 !   
bus9ess pr(its ( su* corporation :i* are
 attributable 7"u rules e/abli%$ by !   
,secret>y7 to #a or m qualifi$ bus9ess  
units 7z def9$ 9 section #ihi7;a77 9 #a 
or m =eign c\ntries1 ov]  4  7,e7       
,section #ijd7;d77#b77;,j71 z r$esignat$
 by subp>agraph 7,c77i71 is am5d$ by    
/rik+ #bjjg ea* place su* t]m appe>s    

7includ+ 9 ! head+7 & ins]t+ #bjbf4     
7#c7 ,transition rule ,! ,secret>y ( !  
,treasury 7or ! ,secret>y's delegate7   
%all e/abli% rules = ! application (    
section #ifj7;c77#b7 ) respect to       
categories ( income describ$ 9          
subp>agraphs 7,a7 & 7,b7 ( section      
#ijd7;d77#b7 7z 9 effect = taxable ye>s 
beg9n+ be=e ,janu>y #a1 #bjbf74  7b7    
,rules = allocation ( c]ta9 d$uctions to
 =eign s\rce net ,,cfc te/$ income =    
purposes ( =eign tax cr$it limitation   
,section #ijd7;b7 is am5d$ by add+ at ! 
end ! foll[+ new p>agraph3  7#g7        
,d$uctions treat$ z allocable to =eign  
s\rce net ,,cfc te/$ income ,9 ! case ( 
a dome/ic corporation & solely =        
purposes ( ! application ( subsection   
7a7 ) respect to am\nts includible 9    
gross income by reason ( section #iea;,a
 7o!r ?an passive category income71 !   
taxpay]'s taxable income f s\rces )\t ! 
,unit$ ,/ates %all be det]m9$--  7,a7 by
 allocat+ & apportion+ any d$uction     
all[$ "u section #bej7;a77#b7 7& any    

d$uction all[$ "u section #afd7;a77#c7 =
 taxes impos$ on am\nts describ$ 9      
section #bej7;a77#b77 to su* income1 &1 
7,b7 by allocat+ & apportion+ any o!r   
d$uction to su* income only if !        
,secret>y det]m9es t su* d$uction is    
directly allocable to su* income4  ,any 
d$uction :i* w\ld 7b = subp>agraph 7,b77
 h be5 allocat$ or apportion$ to su*    
income %all only be allocat$ or         
apportion$ to income :i* is f s\rces )9 
! ,unit$ ,/ates4  4  7c7 ,effective date
  7#a7 ,9 g5]al ,except z provid$ 9     
p>agraph 7#b71 ! am5dm5ts made by ?is   
section %all apply to taxable ye>s      
beg9n+ aft] ,decemb] #ca1 #bjbf4  7#b7  
,modification ( =eign tax cr$it c>ryback
 & c>ry=w>d ,! am5dm5t made by          
subsection 7a77#b77;,b7 %all apply to   
taxes paid or accru$ 9 taxable ye>s     
beg9n+ aft] ,decemb] #ca1 #bjbf4  #e4   
,c>ryov] ( net ,,cfc te/$ loss  7a7 ,9  
g5]al ,section #iea;,a7b7 is am5d$ by   
add+ at ! end ! foll[+ new p>agraph3    
7#c7 ,c>ryov] ( net ,,cfc te/$ loss     

7,a7 ,9 g5]al ,if ! am\nt describ$ 9    
p>agraph 7#a77;,b7 ) respect to any     
,unit$ ,/ates %>ehold] = any taxable ye>
 ( su* ,unit$ ,/ates %>ehold] 7det]m9$  
aft] ! application ( ?is p>agraph )     
respect to am\nts aris+ 9 ! prec$+ #e   
taxable ye>s7 exce$s ! am\nt describ$ 9 
p>agraph 7#a77;,a7 ) respect to su*     
%>ehold] ( su* taxable ye>1 ! am\nt     
o!rwise describ$ 9 p>agraph 7#a77;,b7 ) 
respect to su* %>ehold] = ! succe$+     
taxable ye> %all be increas$ by ! am\nt 
( su* excess4  7,b7 ,prop] adju/m5t 9   
allocations ( net ,,cfc te/$ income to  
controll$ =eign corporations ,prop]     
adju/m5ts %all be made 9 ! application (
 subsection 7d77#b77;,b7 to take into   
acc\nt any decrease 9 global intangible 
l[-tax$ income by reason ( ! application
 ( subp>agraph 7,a74  4  7b7            
,application ( rules ) respect to       
own]%ip *anges ,section #chb7;d7 is     
am5d$ by add+ at ! end ! foll[+ new     
p>agraph3  7#d7 ,application to c>ryov] 
( net ,,cfc te/$ loss ,! t]m pre-*ange  

loss %all include any excess c>ri$ ov]  
"u section #iea;,a7b77#c7 "u rules      
simil> to ! rules ( p>agraph 7#a74  4   
7c7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s (
 =eign corporations beg9n+ aft] ,decemb]
 #ca1 #bjbf1 & to taxable ye>s ( ,unit$ 
,/ates %>ehold]s 9 :i* or ) :i* su*     
taxable ye>s ( =eign corporations end4  
#f4 ,r$et]m9ation ( =eign taxes & relat$
 claims  7a7 ,9 g5]al ,section #ije7;c7 
is am5d$-- 7#a7 9 p>agraph 7#a71 by     
/rik+ or at ! end ( subp>agraph 7,b7 &  
by ins]t+ aft] subp>agraph 7,c7 ! foll[+
 new subp>agraphs3  7,d7 ! taxpay] makes
 a timely *ange 9 its *oice to claim a  
cr$it or d$uction = taxes paid or       
accru$1 or  7,e7 !re is any o!r *ange 9 
! am\nt1 or treatm5t1 ( taxes1 :i*      
affects ! taxpay]'s tax liability "u ?is
 *apt]1  1  7#b7 9 p>agraph             
7#b77;,b77i71 by ins]t+ 1 except z      
o!rwise provid$ by ! ,secret>y1 aft]    
%all1 &  7#c7 9 ! head+1 by /rik+       
accru$4  7b7  ,election ,to treat       

r$et]m9$ tax z paid or accru$ 9 ye> (   
r$et]m9ation  ,section #ije7;c7 is am5d$
 by add+ at ! end ! foll[+ new p>agraph3
  7#f7 ,election to treat r$et]m9$ tax z
 paid or accru$ 9 ye> ( r$et]m9ation    
7,a7 ,9 g5]al ,at ! irrevocable election
 ( ! taxpay]1 9 ! case ( a r$et]m9ation 
"u p>agraph 7#a7--  7i7 accru$ taxes    
relat+ to su* r$et]m9ation %all be      
treat$ z accru$ 9 ! taxable ye> 9 :i*   
su* r$et]m9ation occurs & %all be treat$
 solely = ! purpose ( det]m9+ ! am\nt ( 
su* increase z incurr$ on ! date su*    
taxes 7 accru$1 &  7ii7 ! am\nt ( any   
cr$it all[$ to ! taxpay] by reason ( su*
 r$et]m9ation %all be treat$ z all[$ to 
su* taxpay] 9 ! taxable ye> 9 :i* su*   
r$et]m9ation occurs4  7,b7  ,regulations
  ,! ,secret>y may issue su* regulations
 to prev5t abuse ( ?is p>agraph z !     
,secret>y det]m9es appropriate4  4  7c7 
,modification to special p]iod (        
limitation ,section #feaa7;d77#c7 is    
am5d$-- 7#a7 9 subp>agraph 7,a7--  7,a7 
by ins]t+ a *ange 9 ! liability = be=e  

any taxes paid or accru$1  7,b7 by /rik+
 actually paid & ins]t+ paid 7or deem$  
paid "u section #ifj71 &  7,c7 by ins]t+
 *ange 9 ! liability = be=e =eign taxes 
9 ! head+ !re(1 &  7#b7 9 subp>agraph   
7,b71 by /rik+ ! all[ance ( a cr$it = ! 
taxes & ins]t+ ! all[ance ( an          
additional cr$it by reason ( ! *ange 9  
liability = ! taxes4  7d7 ,effective    
date  7#a7 ,9 g5]al ,except z o!rwise   
provid$ 9 ?is subsection1 ! am5dm5ts    
made by ?is section %all apply to taxes 
paid or accru$ 9 taxable ye>s beg9n+    
aft] ,decemb] #ca1 #bjbf4  7#b7 ,c]ta9  
*anges ,! am5dm5ts made by p>agraphs    
7#a7 & 7#c7 ( subsection 7a7 %all apply 
to *anges t occur on or aft] ! date :i* 
is #fj days aft] ! date ( ! enactm5t (  
?is ,act4  7#c7 ,modification to special
 p]iod ( limitation ,! am5dm5ts made by 
subsection 7c7 %all apply to taxes paid1
 accru$1 or deem$ paid 9 taxable ye>s   
beg9n+ aft] ,decemb] #ca1 #bjbf4  #g4   
,repeal ( =eign tax cr$it haircut = net 
controll$ =eign corporation te/$ income 

7a7 ,9 g5]al ,section #ifj7;d77#a7 is   
am5d$ by /rik+ #ij p]c5t (4  7b7 ,con=m+
 am5dm5ts  7#a7 ,section #ifj7;d7 is    
am5d$ by /rik+ p>agraph 7#d74  7#b7     
,section #gh is am5d$ by /rik+ 7det]m9$ 
)\t reg>d to ! phrase #ij p]c5t ( 9     
subsection 7d77#a7 !re(74  7c7          
,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s      
beg9n+ aft] ,decemb] #ca1 #bjbf4  #h4   
,repeal ( inclusion p]c5tage applicable 
to deem$ paid cr$it = taxes prop]ly     
attributable to te/$ income  7a7 ,9     
,g5]al ,section #ifj7;d7 is am5d$--     
7#a7 by am5d+ p>agraph 7#a7 to read z   
foll[s3  7#a7 ,9 g5]al ,= purposes (    
subp>t ,a ( ?is "p1 if any am\nt is     
includible 9 ! gross income ( a dome/ic 
corporation "u section #iea;,a1 su*     
dome/ic corporation %all be deem$ to h  
paid =eign income taxes equal to !      
aggregate te/$ =eign income taxes paid  
or accru$ by controll$ =eign            
corporations ( su* corporation4  1 &    
7#b7 by /rik+ p>agraph 7#b74  7b7       

,effective date ,! am5dm5ts made by ?is 
section %all apply to taxable ye>s (    
=eign corporations beg9n+ aft] ,decemb] 
#ca1 #bjbf1 & to taxable ye>s ( ,unit$  
,/ates %>ehold]s 9 :i* or ) :i* su*     
taxable ye>s ( =eign corporations end4  
#i4 ,application ( =eign-s\rce divid5d  
d$uction to am\nts receiv$ by controll$ 
=eign corporations  7a7 ,9 g5]al        
,section #bde;,a is am5d$ by r$esignat+ 
subsection 7g7 z subsection 7h7 & by    
ins]t+ aft] subsection 7f7 ! foll[+ new 
subsection3  7g7 ,application to c]ta9  
divid5ds receiv$ by controll$ =eign     
corporations f specifi$ #aj-,p]c5t own$ 
=eign corporations ,if a controll$ =eign
 corporation ) respect to :i* a dome/ic 
corporation is a ,unit$ ,/ates %>ehold] 
receives a divid5d 7o!r ?an a hybrid    
divid5d7 f a specifi$ #aj-p]c5t own$    
=eign corporation ) respect to :i* su*  
dome/ic corporation is also a ,unit$    
,/ates %>ehold]1 ! am\nt includible 9 ! 
gross income ( su* ,unit$ ,/ates        
%>ehold] "u section #iea7;a77#a77;,a7 by

 reason ( ! =eign-s\rce portion ( su*   
divid5d %all be treat$ = purposes ( ?is 
section 9 ! same mann] z if su* am\nt 7 
! =eign-s\rce portion ( a divid5d       
receiv$ by su* ,unit$ ,/ates %>ehold] f 
su* specifi$ #aj-p]c5t own$ =eign       
corporation 7& by apply+ section        
#bdf7;c7 9 respect ( su* am\nt by       
sub/itut+ own$ 7)9 ! mean+ ( section    
#ieh7;a77 = held ea* place su* t]m      
appe>s74  4  7b7 ,effective date ,!     
am5dm5ts made by ?is section %all apply 
to di/ributions made 9 taxable ye>s (   
=eign corporations beg9n+ aft] ,decemb] 
#ca1 #bjbf1 & to taxable ye>s ( ,unit$  
,/ates %>ehold]s 9 :i* or ) :i* su*     
taxable ye>s ( =eign corporations end4  
7c7 ,no inf]5ce ,no?+ 9 ! am5dm5ts made 
by subsection 7a7 %all be con/ru$ to    
create any inf]5ce ) respect to !       
treatm5t ( divid5ds describ$ 9 section  
#bde;,a7g7 ( ! ,int]nal ,rev5ue ,code ( 
#aihf 7z add$ by subsection 7a77 9      
taxable ye>s beg9n+ be=e ! taxable ye>  
describ$ 9 subsection 7b74  #aj4        

,elim9ation ( inclusion ( =eign base    
company sales income & =eign base       
company s]vices income  7a7 ,repeal     
,section #ied7;a7 is am5d$ to read z    
foll[s3  7a7 ,=eign base company income 
,= purposes ( section #ieb7;a77#b71 !   
t]m =eign base company income means =   
any taxable ye> ! =eign p]sonal hold+   
company income = ! taxable ye> 7det]m9$ 
"u subsection 7c7 & r$uc$ z provid$ 9   
subsection 7b77#e774  4  7b7 ,con=m+    
am5dm5ts  7#a7  7,a7 ,section #ied7;d7  
is am5d$ to read z foll[s3  7d7 ,relat$ 
p]son def9$ ,= purposes ( ?is section1 a
 p]son is a relat$ p]son ) respect to a 
controll$ =eign corporation1 if--  7#a7 
su* p]son is an individual1 corporation1
 p>tn]%ip1 tru/1 or e/ate :i* controls1 
or is controll$ by1 ! controll$ =eign   
corporation1 or  7#b7 su* p]son is a    
corporation1 p>tn]%ip1 tru/1 or e/ate   
:i* is controll$ by ! same p]son or     
p]sons :i* control ! controll$ =eign    
corporation4  ,= purposes ( ! prec$+    
s5t5ce1 control means1 ) respect to a   

corporation1 ! own]%ip1 directly or     
indirectly1 ( /ock possess+ m ?an #ej   
p]c5t ( ! total vot+ p[] ( all classes (
 /ock entitl$ to vote or ( ! total value
 ( /ock ( su* corporation4 ,9 ! case ( a
 p>tn]%ip1 tru/1 or e/ate1 control means
 ! own]%ip1 directly or indirectly1 ( m 
?an #ej p]c5t 7by value7 ( ! b5eficial  
int]e/s 9 su* p>tn]%ip1 tru/1 or e/ate4 
,= purposes ( ?is subsection1 rules     
simil> to ! rules ( section #ieh %all   
apply4  4  7,b7 ,! foll[+ sections are  
am5d$ by /rik+ #ied7;d77#c7 ea* place   
su* t]m appe>s & ins]t+ #ied7;d73 7i7   
,section #afb7r77#f77;,b77ii74  7ii7    
,section #bej7;b77#b77;,d7 7z r$esignat$
 by ! prec$+ provisions ( ?is ,act74    
7iii7 ,section #bfg;,a7b77#b74  7iv7    
,section #ijd7;d77#b77;,i74  7v7        
,section #iea;,a7c77#b77;,a77i77,,iv74  
7vi7 ,section #iec7;e74  7vii7 ,section 
#ief7;c77#b77,l77ii77,,ii74  7viii7     
,section #ieh7;b74  7ix7 ,section       
#iga7;f74  7x7 ,section                 
#ihh7;a77#c77;,c74  7xi7 ,section       

#abig7;b77#b74  7xii7 ,subsections      
7d77#c77;,a7 & 7e77#b77;,b77i7 ( section
 #abih4  7xiii7 ,section #adga7;e77#b74 
7xiv7 ,section #caba7z77#b74  7,c7      
,section #ied7;h77#e77;,e7 is am5d$ by  
/rik+ subsection 7d77#c7 & ins]t+       
subsection 7d74  7,d7 ,subp>agraphs 7,a7
 & 7,b7 ( section #ied7;i77#b7 are ea*  
am5d$ by /rik+ subsection 7d77#c7 &     
ins]t+ subsection 7d74  7#b7 ,section   
#ied is am5d$ by /rik+ subsection 7e74  
7c7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s (
 =eign corporations beg9n+ aft] ,decemb]
 #ca1 #bjbf1 & to taxable ye>s ( ,unit$ 
,/ates %>ehold]s ) or )9 :i* su* taxable
 ye>s ( =eign corporations end4  #aa4   
,corporations exempt f subp>t ,f        
inclusion = inve/m5t 9 ,unit$ ,/ates    
prop]ty  7a7 ,9 g5]al ,section #ief7;a7 
is am5d$ by ins]t+ 7o!r ?an a           
corporation7 aft] ,unit$ ,/ates %>ehold]
 9 ! matt] prec$+ p>agraph 7#a74  7b7   
,effective date ,! am5dm5t made by ?is  
section %all apply to taxable ye>s (    

controll$ =eign corporations end+ aft]  
,decemb] #ca1 #bjbf1 & to taxable ye>s (
 ,unit$ ,/ates %>ehold]s ) or )9 :i* su*
 taxable ye>s ( controll$ =eign         
corporations end4  #ab4 ,special rules =
 transf]s ( intangible prop]ty f        
controll$ =eign corporations to ,unit$  
,/ates %>ehold]s  7a7 ,9 g5]al ,subp>t  
,f ( "p ,,iii ( sub*apt] ,n ( *apt] #a  
is am5d$ by add+ at ! end ! foll[+ new  
section3  #iff4 ,transf]s ( intangible  
prop]ty to ,unit$ ,/ates %>ehold]s  7a7 
,9 g5]al ,9 ! case ( any di/ribution (  
intangible prop]ty :i* is held by a     
controll$ =eign corporation on ! date ( 
enactm5t ( ?is section & :i* is describ$
 9 subsection 7b7-- 7#a7 = purposes ( "p
 ,i ( sub*apt] ,c & any o!r provision ( 
?is title specifi$ by ! ,secret>y1 !    
fair m>ket value ( su* prop]ty on ! date
 ( su* di/ribution %all be treat$ z n   
exce$+ ! adju/$ basis ( su* prop]ty     
imm$iately be=e su* di/ribution1 &  7#b7
 if ! di/ribution is n a divid5d-- 7,a7 
! ,unit$ ,/ates %>ehold]'s adju/$ basis 

9 ! /ock ( ! controll$ =eign corporation
 ) respect to :i* su* di/ribution is    
made %all be increas$ by ! am\nt 7if    
any7 ( su* di/ribution :i* w\ld 7b = ?is
 subsection7 be includible 9 gross      
income1 &  7,b7 ! adju/$ basis ( su*    
prop]ty 9 ! h&s ( su* ,unit$ ,/ates     
%>ehold] imm$iately aft] su* di/ribution
 %all be su* adju/$ basis imm$iately    
be=e su* di/ribution r$uc$ by ! am\nt ( 
! increase describ$ 9 subp>agraph 7,a74 
7b7 ,di/ribution ,a di/ribution is      
describ$ 9 ?is section if ! di/ribution 
is--  7#a7 receiv$ by a dome/ic         
corporation f a controll$ =eign         
corporation ) respect to :i* su*        
corporation is a ,unit$ ,/ates %>ehold]1
 &  7#b7 made by ! controll$ =eign      
corporation be=e ! la/ day ( ! ?ird     
taxable ye> ( ! controll$ =eign         
corporation beg9n+ aft] ,decemb] #ca1   
#bjbe4  7c7 ,intangible prop]ty ,=      
purposes ( ?is subsection1 ! t]m        
intangible prop]ty means prop]ty :i*    
is-- 7#a7 intangible prop]ty 7z def9$ 9 

section #cfg7;d77#d7 det]m9$ )\t reg>d  
to subp>agraph 7,f7 !re(71 or  7#b7     
comput] s(tw>e describ$ 9 section       
#aig7;e77#c77;,b74  4  7b7 ,con=m+      
am5dm5ts  7#a7 ,section                 
#aig7;f77#b77;,b77i7 is am5d$ by ins]t+ 
#iff7;a71 aft] #gca14  7#b7 ,! table (  
sections = subp>t ,f ( "p ,,iii (       
sub*apt] ,n ( *apt] #a is am5d$ by add+ 
at ! end ! foll[+ new item3  ,sec4 #iff4
 ,transf]s ( intangible prop]ty to      
,unit$ ,/ates %>ehold]s4  4  7c7        
,effective date ,! am5dm5ts made by ?is 
section %all apply to di/ributions made 
9 taxable ye>s ( =eign corporations     
beg9n+ aft] ,decemb] #ca1 #bjbf1 & to   
taxable ye>s ( ,unit$ ,/ates %>ehold]s 9
 :i* or ) :i* su* taxable ye>s ( =eign  
corporations end4  #ac4 ,net ,,cfc te/$ 
income det]m9$ )\t reg>d to c]ta9 income
 d]iv$ f s]vices p]=m$ 9 ! ,unit$ ,/ates
 ,virg9 ,isl&s  7a7 ,9 g5]al ,section   
#iea;,a7b77#b77;,a77i7 is am5d$ by /rik+
 & at ! end ( subclause 7,,iv71 by /rik+
 ov] at ! end ( subclause 7,v7 & ins]t+ 

&1 & by add+ at ! end ! foll[+ new      
subclause3  7,,vi7 9 ! case ( any       
specifi$ ,unit$ ,/ates %>ehold]1 any    
qualifi$ ,unit$ ,/ates ,virg9 ,isl&s    
s]vices income1 ov]  4  7b7 ,def9itions 
& special rules ,section #iea;,a7b77#b7 
is am5d$ by add+ at ! end ! foll[+ new  
subp>agraph3  7,c7 ,provisions relat$ to
 qualifi$ ,unit$ ,/ates ,virg9 ,isl&s   
s]vices income ,= purposes ( subp>agraph
 7,a77i77,,vi7--  7i7 ,qualifi$ ,virg9  
,isl&s s]vices income ,! t]m qualifi$   
,unit$ ,/ates ,virg9 ,isl&s s]vices     
income means any gross income :i*       
satisfies all ( ! foll[+ requirem5ts3   
7,i7 ,su* gross income is comp5sation = 
labor or p]sonal s]vices 7)9 ! mean+ (  
section #hfb7;a77#c77 p]=m$ 9 ! ,unit$  
,/ates ,virg9 ,isl&s by a corporation   
=m$ "u ! laws ( ! ,unit$ ,/ates ,virg9  
,isl&s4  7,,ii7 ,su* gross income is    
attributable to s]vices p]=m$ f )9 !    
,unit$ ,/ates ,virg9 ,isl&s by          
individuals = ! b5efit ( su*            
corporation4  7,,iii7 ,su* gross income 

is effectively connect$ ) ! conduct ( a 
trade or bus9ess )9 ! ,unit$ ,/ates     
,virg9 ,isl&s4  7ii7 ,specifi$ ,unit$   
,/ates %>ehold] ,! t]m specifi$ ,unit$  
,/ates %>ehold] means any ,unit$ ,/ates 
%>ehold] :i* is-- 7,i7 an individual1   
tru/1 or e/ate1 or  7,,ii7 a closely    
held ,c corporation 7z def9$ 9 section  
#dfi7;j77#a77 if su* corporation acquir$
 its direct or indirect equity int]e/ 9 
! =eign corporation :i* d]iv$ ! qualifi$
 ,unit$ ,/ates ,virg9 ,isl&s s]vices    
income be=e ,decemb] #ca1 #bjbc4  7iii7 
,regulations ,! ,secret>y %all prescribe
 su* regulations or o!r guidance z may  
be necess>y or appropriate to c>ry out  
?is subp>agraph & subp>agraph           
7,a77i77,,vi71 includ+ regulations or   
o!r guidance to prev5t ! abuse ( su*    
subp>agraphs4  4  7c7 ,effective date ,!
 am5dm5ts made by ?is section %all apply
 to taxable ye>s ( =eign corporations   
beg9n+ aft] ! date ( ! enactm5t ( ?is   
,act1 & to taxable ye>s ( ,unit$ ,/ates 
%>ehold]s ) or )9 :i* su* taxable ye>s (

 =eign corporations end4  #ad4 ,repeal (
 modification to def9ition ( adju/$     
taxable income = purposes ( ! limitation
 on bus9ess int]e/  7a7 ,9 g5]al        
,section #afc7;j77#h77;,a7 is am5d$--   
7#a7 9 clause 7iv71 by ins]t+ & aft] !  
comma1 &  7#b7 by /rik+ clause 7vi74    
7b7 ,effective date ,! am5dm5ts made by 
?is section %all apply to taxable ye>s  
beg9n+ aft] ,decemb] #ca1 #bjbf4  #ae4  
,rese>* cr$it treat$ z a specifi$ cr$it 
= all taxpay]s = purposes ( g5]al       
bus9ess cr$it  7a7 ,9 g5]al ,section    
#ch7;c77#d77;,b77ii7 is am5d$ by /rik+ =
 ! taxable ye> ) respect to an eligible 
small bus9ess 7z def9$ 9 p>agraph       
7#e77;,a7 aft] application ( ! rules (  
p>agraph 7#e77;,b774  7b7 ,con=m+       
am5dm5t ,section #ch7;c7 is am5d$ by    
/rik+ p>agraph 7#e74  7c7 ,effective    
date ,! am5dm5ts made by ?is section    
%all apply to taxable ye>s beg9n+ aft]  
,decemb] #ca1 #bjbf4  #af4 ,regulations 
to prev5t duplicative *>ges to capital  
acc\nt = c]ta9 rese>* & developm5t      

exp5ditures  7a7 ,9 g5]al ,section #agd 
is am5d$ by add+ at ! end ! foll[+ new  
subsection3  7e7 ,regulations ,!        
,secret>y %all prescribe regulations or 
o!r guidance z may be necess>y or       
appropriate to c>ry out ! purposes ( ?is
 section1 includ+ regulations or o!r    
guidance t prev5ts ! same economic      
exp5se f be+ *>g$ to capital acc\nt by m
 ?an #a memb] ( a controll$ gr\p (      
corporations 7z def9$ 9 section         
#da7;f77#e774 ,su* regulations %all n   
*ange ! treatm5t ( su* exp5ses = o!r    
purposes ( ?is title4  4