II 

116TH CONGRESS 

1ST SESSION S. 1610 

To amend the Internal Revenue Code of 1986 to modify the global intangible 

low-taxed income by repealing the tax-free deemed return on investments 

and determining net CFC tested income on a per-country basis. 

IN THE SENATE OF THE UNITED STATES 

MAY 22, 2019 

Ms. KLOBUCHAR (for herself, Mr. VAN HOLLEN, and Ms. DUCKWORTH) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to modify 

the global intangible low-taxed income by repealing the 

tax-free deemed return on investments and determining 

net CFC tested income on a per-country basis. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Removing Incentives 

5 for Outsourcing Act’’. 


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1 SEC. 2. MODIFICATION OF TAX ON GLOBAL INTANGIBLE 

2 LOW-TAXED INCOME. 

3 (a) REPEAL OF TAX-FREE DEEMED RETURN ON IN4 VESTMENTS.— 

5 (1) IN GENERAL.—Section 951A(a) of the In6 ternal Revenue Code of 1986 is amended by striking 

7 ‘‘global intangible low-taxed income’’ and inserting 

8 ‘‘net CFC tested income’’. 

9 (2) CONFORMING AMENDMENTS.— 

10 (A) Section 951A of such Code is amended 

11 by striking subsections (b) and (d). 

12 (B) Section 951A(e)(1) of such Code is 

13 amended by striking ‘‘subsections (b), 

14 (c)(1)(A), and’’ and inserting ‘‘subsections 

15 (c)(1)(A) and’’. 

16 (C) Section 951A(f) of such Code is 

17 amended to read as follows: 

18 ‘‘(f) TREATMENT AS SUBPART F INCOME FOR CER19 TAIN PURPOSES.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), any net CFC tested income included in 

22 gross income under subsection (a) shall be treated in 

23 the same manner as an amount included under sec24 tion 951(a)(1)(A) for purposes of applying sections 

25 168(h)(2)(B), 535(b)(10), 851(b), 904(h)(1), 959, 

26 961, 962, 993(a)(1)(E), 996(f)(1), 1248(b)(1), 


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1 1248(d)(1), 6501(e)(1)(C), 6654(d)(2)(D), and 

2 6655(e)(4). 

3 ‘‘(2) EXCEPTION.—The Secretary shall provide 

4 rules for the application of paragraph (1) to other 

5 provisions of this title in any case in which the de6 termination of subpart F income is required to be 

7 made at the level of the controlled foreign corpora8 tion.’’. 

9 (D) Section 960(d)(2)(A) of such Code is 

10 amended by striking ‘‘global intangible low11 taxed income (as defined in section 951A(b))’’ 

12 and inserting ‘‘net CFC tested income (as de13 fined in section 951A(c))’’. 

14 (b) DETERMINATION OF NET CFC TESTED INCOME

15 ON COUNTRY-BY-COUNTRY BASIS.—Section 951A of the 

16 Internal Revenue Code of 1986 is amended by adding at 

17 the end the following: 

18 ‘‘(g) DETERMINATION MADE ON COUNTRY-BY-COUN19 TRY BASIS.— 

20 ‘‘(1) IN GENERAL.—This section shall be ap21 plied with respect to a United States shareholder of 

22 the controlled foreign corporation separately with re23 spect to each foreign country in which the controlled 

24 foreign corporation conducts any trade or business. 

25 ‘‘(2) SPECIAL RULES.— 


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1 ‘‘(A) IN GENERAL.—For purposes of mak2 ing country-by-country determinations under 

3 this section and sections 904 and 960 with re4 spect to net CFC tested income for a taxable 

5 year pursuant to paragraph (1)— 

6 ‘‘(i) taxes paid or accrued to a foreign 

7 country by the controlled foreign corpora8 tion shall be assigned to that country, and 

9 ‘‘(ii) earnings to which such taxes re10 late shall be treated as income assigned to 

11 the country to which those tax payments 

12 are made. 

13 ‘‘(B) EARNINGS ASSIGNED TO TWO OR

14 MORE COUNTRIES.—If the same earnings are 

15 assigned to two or more countries under sub16 paragraph (A), for purposes of paragraph (1) 

17 such earnings and the taxes related thereto 

18 shall be treated as assigned to the country with 

19 the highest statutory corporate tax rate. 

20 ‘‘(3) EARNINGS NOT SUBJECT TO TAX.—If 

21 earnings are not subject to tax by any country, then 

22 with respect to those earnings paragraph (1) shall 

23 not apply. 

24 ‘‘(4) REGULATIONS.—The Secretary shall pre25 scribe such regulations as may be necessary or apVerDate Sep 11 2014 03:49 May 31, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1610.IS S1610

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1 propriate to carry out this subsection, including the 

2 time period in which foreign earnings and the associ3 ated foreign taxes are assigned to a country.’’. 

4 (c) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply with respect to taxable years of 

6 controlled foreign corporations beginning after December 

7 31, 2019, and to taxable years of United States share8 holders in which or with which such taxable years of for9 eign corporations end. 

10 SEC. 3. STUDY AND REPORT ON RESTRUCTURING INTER11 NATIONAL TAX LAWS. 

12 (a) STUDY.—The Chief of Staff of the Joint Com13 mittee on Taxation shall study options for the reform of 

14 laws related to the taxation of income from international 

15 sources, including the provisions of sections 59A, 250, and 

16 951A of the Internal Revenue Code of 1986. Such study 

17 include an evaluation of each option considered with re18 spect to— 

19 (1) the extent to which the option increases or 

20 decreases opportunities for tax avoidance; and 

21 (2) the extent to which the option increases or 

22 decreases incentives for domestic businesses to shift 

23 jobs and operations to other countries. 

24 (b) REPORT.—Not later than 90 days after the date 

25 of the enactment of this Act, the Chief of Staff on the 


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1 Joint Committee on Taxation shall submit to Congress a 

2 report on the results of the study conducted under sub3 section (a). 

Æ 


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