Per-Country Minimum Act

To amend the Internal Revenue Code of 1986 to increase the tax on certain global intangible income. 1. Short title This Act may be cited as the Per-Country Minimum Act 2. Increase in tax on global intangible income (a) In general (1) Reduction in deduction for taxable years before 2026 Section 250(a)(1)(B) 50 percent 37.5 percent (2) 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 37.5 percent . (b) Repeal of tax-Free deemed return on investments (1) In general Section 951A(a) of such Code is amended by striking global intangible low-taxed income net CFC tested income (2) Conforming amendments (A) Section 951A of such Code is amended by striking subsections (b) and (d). (B) Section 951A(e)(1) of such Code is amended by striking subsections (b), (c)(1)(A), and subsections (c)(1)(A) and (C) 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. . (D) Section 960(d)(2)(A) of such Code is amended by striking global intangible low-taxed income (as defined in section 951A(b)) net CFC tested income (as defined in section 951A(c)) (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. . (d) 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.

Summary: Per-Country Minimum Act This bill modifies the tax treatment of foreign source income of domestic corporations to: (1) increase taxes that apply to global intangible income by reducing the deduction that is allowed under current law, (2) eliminate a provision that allows companies to deduct a portion of the tangible assets of their controlled foreign corporations (CFCs) before the tax on foreign income applies, and (3) require net CFC tested income to be determined on a country-by-country basis rather than globally.