,,ii #aaith ,,congress #ast ,session ,s4 #afje ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,may #f1 #bjbe,mr4 ,tillis introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to modify certain provisions relating to the taxation of international entities4 #a4 ,short title1 etc 7a7 ,short title ,this ,act may be cited as the ,international ,competition for ,american ,jobs ,act4 7b7 ,amendment of #aihf code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 #b4 ,permanent extension of look-thru rule for controlled foreign corporations 7a7 ,in general ,section #ied7;c77#f77;,c7 is amended by striking and before ,january #a1 #bjbf14 7b7 ,effective date ,the amendment made by this section shall apply to taxable years of foreign corporations beginning after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders with or within which such taxable years of foreign corporations end4 #c4 ,modification of deduction for foreign-derived intangible income and global intangible low-taxed income 7a7 ,in general ,section #bej7;a7 is amended to read as follows3 7a7 ,allowance of deduction ,in the case of a domestic corporation for any taxable year1 there shall be allowed as a deduction an amount equal to the sum of-- 7#a7 #cg4e percent of the foreign-derived intangible income of such domestic corporation for such taxable year1 plus 7#b7 #ej percent of-- 7,a7 the global intangible low-taxed income amount 7if any7 which is included in the gross income of such domestic corporation under section #iea;,a for such taxable year1 and 7,b7 the amount treated as a dividend received by such corporation under section #gh which is attributable to the amount described in subparagraph 7,a74 4 7b7 ,deduction not ,to apply against dividends received deduction limitation ,section #bdf7;b77#a7 is amended by striking subsection 7a7 and 7b7 of section #bde1 and section #bej the first place it appears and inserting and subsection 7a7 and 7b7 of section #bde4 7c7 ,deduction taken into account in determining net operating loss deduction ,section #agb7;d7 is amended by striking paragraph 7#i74 7d7 ,expense apportionment limited to directly related expenses ,section #bej7;b77#c77;,a77ii7 is amended to read as follows3 7ii7 expenses and deductions 7including taxes7 directly related to such gross income4 4 7e7 ,deduction for foreign-,derived deduction eligible income 7#a7 ,in general ,section #bej7;a77#a71 as amended by subsection 7a71 is amended by striking foreign-derived intangible income and inserting foreign-derived deduction eligible income4 7#b7 ,conforming amendments 7,a7 ,section #bej7;b71 as amended by subsection 7c71 is amended-- 7i7 by striking paragraphs 7#a7 and 7#b71 7ii7 by redesignating paragraphs 7#d7 and 7#e7 as paragraphs 7#a7 and 7#b71 respectively1 and by moving such paragraphs before paragraph 7#c71 7iii7 in paragraph 7#b77;,b77ii71 as so redesignated1 by striking paragraph 7#d77;,b7 and inserting paragraph 7#a77;,b71 and 7iv7 by striking intangible in the heading thereof and inserting deduction eligible4 7,b7 7i7 ,the heading for section #bej is amended by striking intangible in the heading thereof and inserting deduction eligible4 7ii7 ,the item relating to section #bej in the table of sections for part ,,viii of subchapter ,b of chapter #a is amended by striking intangible and inserting deduction eligible4 7f7 ,look-,thru for interest payments ,section #bej7;b77#b71 as redesignated under subsection 7e71 is amended by adding at the end the following3 ,for purposes of this subsection1 foreign-derived deduction eligible income shall include interest paid by a controlled foreign corporation to corporation that is a ,united ,states shareholder with respect to such foreign corporation if such controlled foreign corporation is related 7within the meaning of section #ied7;d77 to such ,united ,states shareholder and such interest is an amount which is described in section #iea;,a7c77#b77;,a77ii7 with respect to such controlled foreign corporation4 ,to the extent provided by the ,secretary in regulations1 the preceding sentence shall not apply to interest paid by a controlled foreign corporation to a related ,united ,states shareholder if such interest is directly related to interest expense of such shareholder 7or another related person74 4 7g7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 #d4 ,modifications to base erosion minimum tax 7a7 ,base erosion minimum tax amount determined without regard to credits 7#a7 ,in general ,section #ei;,a7b77#a77;,b7 is amended to read as follows3 7,b7 an amount equal to the regular tax liability 7as defined in section #bf7;b77 of the taxpayer for the taxable year4 4 7#b7 ,conforming amendment ,section #ei;,a7b7 is amended by striking paragraph 7#d74 7b7 ,application of general business credit against beat ,the second sentence of section #ch7;c77#a7 is amended by striking and the tax imposed by section #ee and inserting 1 the tax imposed by section #ee1 and the tax imposed by section #ei;,a4 7c7 ,elimination of modifications for taxable years after #bjbe 7#a7 ,in general ,section #ei;,a7b7 is amended by striking paragraph 7#b7 and redesignating paragraph 7#c7 as paragraph 7#b74 7#b7 ,conforming amendments 7,a7 ,section #ei;,a7b77#a7 is amended by striking paragraphs 7#b7 and 7#c7 and inserting paragraph 7#b74 7,b7 ,paragraph 7#b7 of section #ei;,a7b71 as redesignated by paragraph 7#a71 is amended by striking under paragraphs 7#a77;,a7 and 7#b77;,a7 shall each be increased and inserting under paragraph 7#a77;,a7 shall be increased4 7,c7 ,section #ei;,a7e77#a77;,c7 is amended by striking subsection 7b77#c77;,b7 and inserting subsection 7b77#b77;,b74 7d7 ,expansion and consolidation of rules ,to exempt certain payments from treatment as base erosion payments 7#a7 ,in general ,section #ei;,a is amended by redesignating subsection 7i7 as subsection 7j7 and by inserting after subsection 7h7 the following new subsection3 7i7 ,certain payments not treated as base erosion payments 7#a7 ,exception for payments on which tax is imposed 7,a7 ,in general ,an amount shall not be treated as a base erosion payment if tax is 7or was at the time of payment or accrual7 imposed by this chapter with respect to such amount 7other than by this section74 7,b7 ,treatment of certain deductions ,for purposes of subparagraph 7,a71 tax shall be treated as imposed by this chapter without regard to any deduction allowed under part ,,viii of subchapter ,b4 7,c7 ,application of certain rules ,the amount not treated as a base erosion payment by reason of this paragraph shall be determined under rules similar to the rules of section #afc7;j77#e7 7as in effect before the date of the enactment of ,public ,law #aae-ig74 7#b7 ,exception for certain payments subject to sufficient foreign tax 7,a7 ,in general ,an amount shall not be treated as a base erosion payment if the taxpayer establishes to the satisfaction of the ,secretary that such amount was made to a foreign person which is a related party of the taxpayer that is subject to an effective rate of foreign income tax 7as defined in section #ijd7;d77#b77;,f77 which is not less than #ah4i percent4 7,b7 ,certain payments to related parties ,to the extent provided by the ,secretary in regulations1 an amount paid to a foreign person which is a related party of the taxpayer shall be treated as paid to another foreign person which is a related party of the taxpayer if such second foreign person is subject to an effective rate of foreign income tax 7as defined in section #ijd7;d77#b77;,f77 which is less than #ah4i percent1 to the extent the amount so paid directly or indirectly funds a payment to such second foreign person4 7,c7 ,determination on basis of applicable financial statements ,except as otherwise provided by the ,secretary under subparagraph 7,d71 the effective rate of foreign income tax with respect to any amount may be established on the basis of applicable financial statements 7as defined in section #dea7;b77#c774 7,d7 ,regulations ,the ,secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this paragraph1 including regulations or other guidance providing procedures for determining the effective rate of foreign income tax to which any amount is subject4 ,such procedures may require that any transaction or series of transactions among multiple parties be recharacterized as one or more transactions directly among any #b or more of such parties where the ,secretary determines that such recharacterization is appropriate to carry out1 or prevent avoidance of1 the purposes of this section4 7#c7 ,exception for certain amounts with respect to services ,subsections 7d77#a7 and 7d77#b7 shall not apply to so much of any amount paid or accrued by a taxpayer for services as does not exceed the total services cost of such services4 ,the preceding sentence shall not apply unless such services meet the requirements for eligibility for use of the services cost method under section #dhb 7determined without regard to the requirement that the services not contribute significantly to fundamental risks of business success or failure74 4 7#b7 ,conforming amendment ,section #ei;,a7d7 is amended by striking paragraph 7#e74 7e7 ,other modifications 7#a7 ,section #ei;,a7b77#c77;,b77ii7 is amended by striking registered securities dealer and inserting securities dealer registered4 7#b7 ,section #ei;,a7h77#b77;,b7 is amended by striking section #fjch;,b7b77#b7 and inserting section #fjch;,a7b77#b74 7#c7 ,section #ei;,a7j77#b71 as redesignated by subsection 7c71 is amended by striking subsection 7g77#c7 and inserting subsection 7h77#c74 7f7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 #e4 ,modification of foreign tax credit limitation baskets 7a7 ,modification of foreign tax credit limitation baskets 7#a7 ,in general ,section #ijd7;d77#a7 is amended by striking subparagraphs 7,a7 and 7,b7 and by redesignating subparagraphs 7,c7 and 7,d7 as subparagraphs 7,a7 and 7,b71 respectively4 7#b7 ,conforming amendments 7,a7 ,section #ijd7;d77#b77;,a77ii7 is amended by striking income described in paragraph 7#a77;,a71 foreign branch income1 and4 7,b7 ,section #ijd7;c7 is amended by striking the last sentence4 7,c7 7i7 ,section #ijd7;d77#b7 is amended by striking subparagraph 7,j7 and by redesignating subparagraph 7,k7 as subparagraph 7,j74 7ii7 ,section #bej7;b77#c77;,a77i77,,vi7 is amended to read as follows3 7,,vi7 the business profits of such corporation which are attributable 7under rules established by the ,secretary7 to #a or more qualified business units 7as defined in section #ihi7;a77 in #a or more foreign countries1 over 4 7,d7 ,section #ijd7;d77#b77;,j71 as redesignated by subparagraph 7,c77i71 is amended by striking #bjjg each place it appears in the text and in the heading and inserting #bjbf4 7#c7 ,transition rule ,the ,secretary of the ,treasury 7or the ,secretary's delegate7 shall establish rules for the application of section #ifj7;c77#b7 with respect to categories of income described in subparagraphs 7,a7 and 7,b7 of section #ijd7;d77#b7 7as in effect for taxable years beginning before ,january #a1 #bjbf74 7b7 ,rules for allocation of certain deductions to foreign source global intangible low-taxed income for purposes of foreign tax credit limitation ,section #ijd7;b7 is amended by adding at the end the following new paragraph3 7#e7 ,deductions treated as allocable to foreign source global intangible low-taxed income ,in the case of a domestic corporation and solely for purposes of the application of subsection 7a7 with respect to amounts includible inc gross income by reason of section #iea;,a 7other than passive category income71 the taxpayer's taxable income from sources without the ,united ,states shall be determined-- 7,a7 by allocating and apportioning any deduction allowed under section #bej7;a77#b7 7and any deduction allowed under section #afd7;a77#c7 for taxes imposed on amounts described in section #bej7;a77#b77 to such income1 and 7,b7 by allocating and apportioning any other deduction to such income only if the ,secretary determines that such deduction is directly allocable to such income4 ,any deduction which would 7but for subparagraph 7,b77 have been allocated or apportioned to such income shall only be allocated or apportioned to income which is from sources within the ,united ,states4 4 7c7 ,effective date 7#a7 ,in general ,except as provided in paragraph 7#b71 the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 7#b7 ,modification of foreign tax credit carryback and carryforward ,the amendment made by subsection 7a77#b77;,b7 shall apply to taxes paid or accrued in taxable years beginning after ,december #ca1 #bjbe4 #f4 ,restoration of limitation on downward attribution of stock ownership in applying constructive ownership rules 7a7 ,in general ,section #ieh7;b7 is amended-- 7#a7 by inserting after paragraph 7#c7 the following3 7#d7 ,subparagraphs 7,a71 7,b71 and 7,c7 of section #cah7;a77#c7 shall not be applied so as to consider a ,united ,states person as owning stock which is owned by a person who is not a ,united ,states person4 1 and 7#b7 by striking ,paragraph 7#a7 in the last sentence and inserting ,paragraphs 7#a7 and 7#d74 7b7 ,foreign controlled ,united ,states shareholders ,subpart ,f of part ,,iii of subchapter ,n of chapter #a is amended by inserting after section #iea;,a the following new section3 #iea;,b4 ,amounts included in gross income of foreign controlled ,united ,states shareholders 7a7 ,in general ,in the case of any foreign controlled ,united ,states shareholder of a foreign controlled foreign corporation-- 7#a7 this subpart 7other than sections #iea;,a1 #iea7;b71 and #ieg7 shall be applied with respect to such shareholder 7separately from1 and in addition to1 the application of this subpart without regard to this section7-- 7,a7 by substituting foreign controlled ,united ,states shareholder for ,united ,states shareholder each place it appears therein1 and 7,b7 by substituting foreign controlled foreign corporation for controlled foreign corporation each place it appears therein1 and 7#b7 section #iea;,a shall be applied with respect to such shareholder-- 7,a7 by treating each reference to ,united ,states shareholder in such section as including a reference to such shareholder1 and 7,b7 by treating each reference to controlled foreign corporation in such section as including a reference to such foreign controlled foreign corporation4 7b7 ,foreign controlled ,united ,states shareholder ,for purposes of this section1 the term foreign controlled ,united ,states shareholder means1 with respect to any foreign corporation1 any ,united ,states person which would be a ,united ,states shareholder with respect to such foreign corporation if-- 7#a7 section #iea7;b7 were applied by substituting more than #ej percent for #aj percent or more1 and 7#b7 section #ieh7;b7 were applied without regard to paragraph 7#d7 thereof4 7c7 ,foreign controlled foreign corporation ,for purposes of this section1 the term foreign controlled foreign corporation means a foreign corporation1 other than a controlled foreign corporation1 which would be a controlled foreign corporation if section #ieg7;a7 were applied-- 7#a7 by substituting foreign controlled ,united ,states shareholders for ,united ,states shareholders1 and 7#b7 by substituting section #ieh7;b7 7other than paragraph 7#d7 thereof7 for section #ieh7;b74 7d7 ,regulations ,the ,secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section1 including regulations or other guidance-- 7#a7 to treat a foreign controlled ,united ,states shareholder or a foreign controlled foreign corporation as a ,united ,states shareholder or as a controlled foreign corporation1 respectively1 for purposes of provisions of this title other than this subpart1 and 7#b7 to prevent the avoidance of the purposes of this section4 4 7c7 ,clerical amendment ,the table of sections for subpart ,f of part ,,iii of subchapter ,n of chapter #a is amended by inserting after the item relating to section #iea;,a the following new item3 ,sec4 #iea;,b4 ,amounts included in gross income of foreign controlled ,united ,states shareholders4 4 7d7 ,effective date ,the amendments made by this section shall apply to-- 7#a7 the last taxable year of foreign corporations beginning before ,january #a1 #bjbf1 and each subsequent taxable year of such foreign corporations1 and 7#b7 taxable years of ,united ,states persons in which or with which such taxable years of foreign corporations end4 7e7 ,no inference ,the amendments made by this section shall not be construed to create any inference with respect to the proper application of any provision of the ,internal ,revenue ,code of #aihf with respect to taxable years beginning before the taxable years to which such amendments apply4 #g4 ,carryover of net ,,cfc tested loss 7a7 ,in general ,section #iea;,a7c7 is amended by adding at the end the following new paragraph3 7#c7 ,carryover of net ,,cfc tested loss 7,a7 ,in general ,if the amount described in paragraph 7#a77;,b7 with respect to any ,united ,states shareholder for any taxable year of such ,united ,states shareholder 7determined after the application of this paragraph with respect to amounts arising in preceding taxable years7 exceeds the amount described in paragraph 7#a77;,a7 with respect to such shareholder of such taxable year1 the amount otherwise described in paragraph 7#a77;,b7 with respect to such shareholder for the succeeding taxable year shall be increased by the amount of such excess4 7,b7 ,proper adjustment in allocations of global intangible low-taxed income to controlled foreign corporations ,proper adjustments shall be made in the application of subsection 7f77#b77;,b7 to take into account any decrease in global intangible low-taxed income by reason of the application of subparagraph 7,a74 4 7b7 ,application of rules with respect to ownership changes ,section #chb7;d7 is amended by adding at the end the following new paragraph3 7#d7 ,application to carryover of net ,,cfc tested loss ,the term pre-change loss shall include any excess carried over under section #iea;,a7c77#c7 under rules similar to the rules of paragraph 7#a74 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years of foreign corporations beginning after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4 #h4 ,redetermination of foreign taxes and related claims 7a7 ,in general ,section #ije7;c7 is amended-- 7#a7 in paragraph 7#a71 by striking or at the end of subparagraph 7,b7 and by inserting after subparagraph 7,c7 the following new subparagraphs3 7,d7 the taxpayer makes a timely change in its choice to claim a credit or deduction for taxes paid or accrued1 or 7,e7 there is any other change in the amount1 or treatment1 of taxes1 which affects the taxpayer's tax liability under this chapter1 1 7#b7 in paragraph 7#b77;,b77i71 by inserting 1 except as otherwise provided by the ,secretary1 after shall1 and 7#c7 by striking accrued in the heading thereof4 7b7 ,modification to time for claiming credit or deduction ,section #ija7;a7 is amended by striking the second sentence and inserting the following3 ,such choice for any taxable year may be made or changed at any time before the expiration of the applicable period prescribed by section #feaa for making a claim for credit or refund of an overpayment of the tax imposed by this chapter for such taxable year that is attributable to such amounts44 7c7 ,modification to special period of limitation ,section #feaa7;d77#c7 is amended-- 7#a7 in subparagraph 7,a7-- 7,a7 by inserting a change in the liability for before any taxes paid or accrued1 7,b7 by striking actually paid and inserting paid 7or deemed paid under section #ifj71 and 7,c7 by inserting change in the liability for before foreign taxes in the heading thereof1 and 7#b7 in subparagraph 7,b71 by striking the allowance of a credit for the taxes and inserting the allowance of an additional credit by reason of the change in liability for the taxes4 7d7 ,effective date 7#a7 ,in general ,except as otherwise provided in this subsection1 the amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after ,december #ca1 #bjbe4 7#b7 ,certain changes ,the amendments made by paragraphs 7#a7 and 7#c7 of subsection 7a7 shall apply to changes that occur on or after the date which is #fj days after the date of the enactment of this ,act4 7#c7 ,modification to special period of limitation ,the amendments made by subsection 7c7 shall apply to taxes paid1 accrued1 or deemed paid in taxable years beginning after ,december #ca1 #bjbe4 #i4 ,repeal of foreign tax credit haircut for global intangible low-taxed income 7a7 ,in general ,section #ifj7;d77#a7 is amended by striking #hj percent of4 7b7 ,conforming amendment ,section #gh is amended by striking 7determined without regard to the phrase #hj percent of in subsection 7d77#a7 thereof74 7c7 ,effective date ,the amendments made by this section shall apply to taxable years of foreign corporations beginning after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4 #aj4 ,application of foreign-source dividend deduction to amounts received by controlled foreign corporations 7a7 ,in general ,section #bde;,a is amended by redesignating subsection 7g7 as subsection 7h7 and by inserting after subsection 7f7 the following new subsection3 7g7 ,application to certain dividends received by controlled foreign corporations from specified #aj-,percent owned foreign corporations ,except as otherwise provided by the ,secretary in regulations or other guidance1 if a controlled foreign corporation with respect to which a domestic corporation is a ,united ,states shareholder receives a dividend 7other than a hybrid dividend7 from a specified #aj-percent owned foreign corporation with respect to which such domestic corporation is also a ,united ,states shareholder1 the amount includible in the gross income of such ,united ,states shareholder under section #iea7;a77#a77;,a7 by reason of the foreign-source portion of such dividend shall be treated for purposes of this section in the same manner as if such amount were the foreign-source portion of a dividend received by such ,united ,states shareholder from such specified #aj-percent owned foreign corporation4 4 7b7 ,effective date ,the amendments made by this section shall apply to distributions made in taxable years of foreign corporations beginning after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4 7c7 ,no inference ,nothing in the amendments made by subsection 7a7 shall be construed to create any inference with respect to the treatment of dividends described in section #bde;,a7g7 of the ,internal ,revenue ,code of #aihf 7as added by subsection 7a77 in taxable years beginning before the taxable year described in subsection 7b74 #aa4 ,elimination of inclusion of foreign base company sales income and foreign base company services income 7a7 ,repeal ,subsection 7a7 of section #ied is amended-- 7#a7 by striking the sum of and all that follows through the foreign personal holding company income in paragraph 7#a7 and inserting the foreign personal holding company income1 7#b7 by striking the comma after subsection 7c7 and reduced as provided in subsection 7b77#e77 and inserting a period1 and 7#c7 by striking paragraphs 7#b7 and 7#c74 7b7 ,conforming amendments 7#a7 7,a7 ,section #ied7;d7 is amended to read as follows3 7d7 ,related person defined ,for purposes of this section1 a person is a related person with respect to a controlled foreign corporation1 if-- 7#a7 such person is an individual1 corporation1 partnership1 trust1 or estate which controls1 or is controlled by1 the controlled foreign corporation1 or 7#b7 such person is a corporation1 partnership1 trust1 or estate which is controlled by the same person or persons which control the controlled foreign corporation4 ,for purposes of the preceding sentence1 control means1 with respect to a corporation1 the ownership1 directly or indirectly1 of stock possessing more than #ej percent of the total voting power of all classes of stock entitled to vote or of the total value of stock of such corporation4 ,in the case of a partnership1 trust1 or estate1 control means the ownership1 directly or indirectly1 of more than #ej percent 7by value7 of the beneficial interests in such partnership1 trust1 or estate4 ,for purposes of this subsection1 rules similar to the rules of section #ieh shall apply4 4 7,b7 ,the following sections are amended by striking #ied7;d77#c7 each place it appears and inserting #ied7;d73 7i7 ,section #afb7r77#f77;,b77ii74 7ii7 ,section #bej7;b77#b77;,d7 7as redesignated by section #c74 7iii7 ,section #bfg;,a7b77#b74 7iv7 ,section #ijd7;d77#b77;,i74 7v7 ,section #iea;,a7c77#b77;,a77i77,,iv74 7vi7 ,section #iec4 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 and 7e77#b77;,b77i7 of section #abih4 7xiii7 ,section #adga7;e77#b74 7xiv7 ,section #caba7z77#b74 7,c7 ,section #ied7;h77#e77;,e7 is amended by striking subsection 7d77#c7 and inserting subsection 7d74 7,d7 ,subparagraphs 7,a7 and 7,b7 of section #ied7;i77#b7 are each amended by striking subsection 7d77#c7 and inserting subsection 7d74 7#b7 ,section #ied is amended by striking subsections 7e7 and 7g74 7c7 ,effective date ,the amendments made by this section shall apply to taxable years of foreign corporations beginning after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders with or within which such taxable years of foreign corporations end4 #ab4 ,corporations exempt from subpart ,f inclusion for investment in ,united ,states property 7a7 ,in general ,section #ief7;a7 is amended by inserting 7other than a corporation7 after ,united ,states shareholder in the matter preceding paragraph 7#a74 7b7 ,effective date ,the amendment made by this section shall apply to taxable years of controlled foreign corporations ending after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders with or within which such taxable years of controlled foreign corporations end4 #ac4 ,other modifications relating to foreign tax credit 7a7 ,creditable taxes ,section #ija is amended by redesignating subsection 7n7 as subsection 7o7 and by inserting after subsection 7m7 the following new subsection3 7n7 ,determination of income taxes ,for purposes of this section1 a foreign tax shall be treated as an income tax if the predominant character of the tax is an income tax4 ,the determinations made under the preceding sentence and under section #ijc shall be made without regard to whether the income or other base of the tax bears a nexus to the jurisdiction imposing the tax4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjbe4 #ad4 ,special rules for transfers of intangible property from controlled foreign corporations to ,united ,states shareholders 7a7 ,in general ,subpart ,f of part ,,iii of subchapter ,n of chapter #a is amended by adding at the end the following new section3 #iff4 ,transfers of intangible property to ,united ,states shareholders 7a7 ,in general ,in the case of any distribution of intangible property which is held by a controlled foreign corporation on the date of enactment of this section and which is described in subsection 7b7-- 7#a7 for purposes of part ,i of subchapter ,c and any other provision of this title specified by the ,secretary1 the fair market value of such property on the date of such distribution shall be treated as not exceeding the adjusted basis of such property immediately before such distribution1 and 7#b7 if the distribution is not a dividend-- 7,a7 the ,united ,states shareholder's adjusted basis in the stock of the controlled foreign corporation with respect to which such distribution is made shall be increased by the amount 7if any7 of such distribution which would 7but for this subsection7 be includible in gross income1 and 7,b7 the adjusted basis of such property in the hands of such ,united ,states shareholder immediately after such distribution shall be such adjusted basis immediately before such distribution reduced by the amount of the increase described in subparagraph 7,a74 7b7 ,distribution ,a distribution is described in this section if the distribution is-- 7#a7 received by a domestic corporation from a controlled foreign corporation with respect to which such corporation is a ,united ,states shareholder1 and 7#b7 made by the controlled foreign corporation before the last day of the third taxable year of the controlled foreign corporation beginning after ,december #ca1 #bjbe4 7c7 ,intangible property ,for purposes of this subsection1 the term intangible property has the meaning given such term by section #cfg7;d77#d7 or which is computer software described in section #aig7;e77#c77;,b74 4 7b7 ,conforming amendments 7#a7 ,section #aig7;f77#b77;,b77i7 is amended by inserting #iff7;a71 after #gca14 7#b7 ,the table of sections for subpart ,f of part ,,iii of subchapter ,n of chapter #a is amended by adding at the end the following new item3 ,sec4 #iff4 ,transfers of intangible property to ,united ,states shareholders4 4 7c7 ,effective date ,the amendments made by this section shall apply to distributions made in taxable years of foreign corporations beginning after ,december #ca1 #bjbe1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4 #ae4 ,global intangible low-taxed income determined without regard to certain income derived from services performed in the ,virgin ,islands 7a7 ,in general ,section #iea;,a7c77#b77;,a77i7 is amended by striking and at the end of subclause 7,,iv71 by striking the period at the end of subclause 7,v7 and inserting 1 and1 and by adding at the end the following new subclause3 7,,vi7 in the case of any specified ,united ,states shareholder1 any qualified ,virgin ,islands services income4 4 7b7 ,definitions and special rules ,section #iea;,a7c77#b7 is amended by adding at the end the following new subparagraph3 7,c7 ,provisions related to qualified ,virgin ,islands services income ,for purposes of subparagraph 7,a77i77,,vi7-- 7i7 ,qualified ,virgin ,islands services income ,the term qualified ,virgin ,islands services income means any gross income which satisfies all of the following requirements3 7,i7 ,such gross income is compensation for labor or personal services 7within the meaning of section #hfb7;a77#c77 performed in the ,virgin ,islands by a corporation formed under the laws of the ,virgin ,islands4 7,,ii7 ,such gross income is attributable to services performed from within the ,virgin ,islands by individuals for the benefit of such corporation4 7,,iii7 ,such gross income is effectively connected with the conduct of a trade or business within the ,virgin ,islands4 7ii7 ,specified ,united ,states shareholder ,the term specified ,united ,states shareholder means any ,united ,states shareholder which is-- 7,i7 an individual1 trust1 or estate1 or 7,,ii7 a closely held ,c corporation 7as defined in section #dfi7;j77#a77 if such corporation acquired its direct or indirect equity interest in the foreign corporation which derived the qualified ,virgin ,islands services income before ,december #ca1 #bjbc4 7iii7 ,regulations ,the ,secretary shall prescribe such regulations or other guidance as may be necessary or appropriate to carry out this subparagraph and subparagraph 7,a77i77,,vi71 including regulations or other guidance to prevent the abuse of such subparagraphs4 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years of foreign corporations beginning after the date of the enactment of this ,act1 and to taxable years of ,united ,states shareholders with or within which such taxable years of foreign corporations end4