Section 1 Short title
This Act may be cited as the “Per-Country Minimum Act”.
Per-Country Minimum Act
A BILL
To amend the Internal Revenue Code of 1986 to increase the tax on certain global intangible income.
Sec. 2 Increase in tax on global intangible income
In general—
Reduction in deduction for taxable years before 2026— Section 250(a)(1)(B) of the Internal Revenue Code of 1986 is amended by striking “50 percent” and inserting “37.5 percent”.
Reduction in deduction for taxable years after 2025— Section 250(a)(3)(B) of such Code is amended to read as follows:
“(B) “21.875 percent” for “37.5 percent” in subparagraph (B).”
Repeal of tax-Free deemed return on investments—
In general— Section 951A(a) of such Code is amended by striking “global intangible low-taxed income” and inserting “net CFC tested income”.
Conforming amendments—
Section 951A of such Code is amended by striking subsections (b) and (d).
Section 951A(e)(1) of such Code is amended by striking “subsections (b), (c)(1)(A), and” and inserting “subsections (c)(1)(A) and”.
Section 951A(f) of such Code is amended to read as follows:
“(f) Treatment as subpart F income for certain purposes
“(1) In general—Except as provided in paragraph (2), any net CFC tested income included in gross income under subsection (a) shall be treated in the same manner as an amount included under section 951(a)(1)(A) for purposes of applying sections 168(h)(2)(B), 535(b)(10), 851(b), 904(h)(1), 959, 961, 962, 993(a)(1)(E), 996(f)(1), 1248(b)(1), 1248(d)(1), 6501(e)(1)(C), 6654(d)(2)(D), and 6655(e)(4).
“(2) Exception—The Secretary shall provide rules for the application of paragraph (1) to other provisions of this title in any case in which the determination of subpart F income is required to be made at the level of the controlled foreign corporation.”
Section 960(d)(2)(A) of such Code is amended by striking “global intangible low-taxed income (as defined in section 951A(b))” and inserting “net CFC tested income (as defined in section 951A(c))”.
Determination of net CFC tested income on country-by-Country basis— Section 951A of such Code is amended by adding at the end the following:
“(g) Determination made on country-by-Country basis
“(1) In general—This section shall be applied with respect to a United States shareholder of the controlled foreign corporation separately with respect to each foreign country in which the controlled foreign corporation conducts any trade or business.
“(2) Special rules
“(A) In general—For purposes of making country-by-country determinations under this section and sections 904 and 960 with respect to net CFC tested income for a taxable year pursuant to paragraph (1)—
“(i) taxes paid or accrued to a foreign country by the controlled foreign corporation shall be assigned to that country, and
“(ii) earnings to which such taxes relate shall be treated as income assigned to the country to which those tax payments are made.
“(B) Earnings assigned to two or more countries—If the same earnings are assigned to two or more countries under subparagraph (A), for purposes of paragraph (1) such earnings and the taxes related thereto shall be treated as assigned to the country with the highest statutory corporate tax rate.
“(3) Earnings not subject to tax—If earnings are not subject to tax by any country, then with respect to those earnings paragraph (1) shall not apply.
“(4) Regulations—The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out this subsection, including the time period in which foreign earnings and the associated foreign taxes are assigned to a country.”
Effective date— The amendments made by this section shall apply with respect to taxable years of controlled foreign corporations beginning after December 31, 2018, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end.