I 
119TH CONGRESS 
1ST SESSION 
H. R. 591 
To provide an enforcement of remedies against the extraterritorial taxes 
and discriminatory taxes of foreign countries. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 21, 2025 
Mr. SMITH of Missouri (for himself, Mr. BUCHANAN, Mr. SMITH of Nebraska, 
Mr. KELLY of Pennsylvania, Mr. SCHWEIKERT, Mr. LAHOOD, Mr. 
ARRINGTON, Mr. ESTES, Mr. SMUCKER, Mr. HERN of Oklahoma, Mrs. 
MILLER
of 
West 
Virginia, Mr. MURPHY, Mr. KUSTOFF, Mr. 
FITZPATRICK, Mr. STEUBE, Ms. TENNEY, Mrs. FISCHBACH, Mr. MOORE 
of Utah, Ms. VAN DUYNE, Mr. FEENSTRA, Ms. MALLIOTAKIS, Mr. 
CAREY, Mr. YAKYM, Mr. MILLER of Ohio, Mr. BEAN of Florida, and Mr. 
MORAN) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Over-
sight and Government Reform, for a period to be subsequently deter-
mined by the Speaker, in each case for consideration of such provisions 
as fall within the jurisdiction of the committee concerned 
A BILL 
To provide an enforcement of remedies against the 
extraterritorial taxes and discriminatory taxes of foreign 
countries. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Defending American 
Jobs and Investment Act’’. 
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SEC. 
2. 
ENFORCEMENT 
OF 
REMEDIES 
AGAINST 
EXTRATERRITORIAL TAXES AND DISCRIMINA-
TORY TAXES. 
(a) IN GENERAL.—Subpart D of part II of sub-
chapter N of chapter 1 is amended by adding at the end 
the following new section: 
‘‘SEC. 
899. 
ENFORCEMENT 
OF 
REMEDIES 
AGAINST 
EXTRATERRITORIAL TAXES AND DISCRIMINA-
TORY TAXES. 
‘‘(a) REPORT ON EXTRATERRITORIAL TAXES AND 
DISCRIMINATORY TAXES.— 
‘‘(1) IN
GENERAL.—Not later than 90 days 
after the date of the enactment of this section, and 
not less frequently than once every 180 days there-
after, the Secretary shall submit to the appropriate 
committees of Congress a report which lists each 
foreign country that has (as of the date of the sub-
mission of such report) one or more extraterritorial 
taxes or discriminatory taxes. 
‘‘(2) ADDITIONAL
ITEMS.—Each report sub-
mitted under paragraph (1) shall include— 
‘‘(A) with respect to each extraterritorial 
tax or discriminatory tax of any foreign country 
listed in such report, a description of such tax 
including the rate thereof and the dates on 
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which such tax was enacted and takes effect, 
and 
‘‘(B) if the Secretary determines that any 
foreign country no longer has (as of the date of 
the 
submission 
of 
such 
report) 
an 
extraterritorial tax or discriminatory tax which 
was described in any prior report submitted 
under this subsection— 
‘‘(i) the dates on which the permanent 
repeal or termination of such tax was en-
acted and takes effect, and 
‘‘(ii) whether such foreign country has 
(as of such date) any other extraterritorial 
taxes or discriminatory taxes. 
‘‘(3) DETERMINATION
OF
WHEN
A
FOREIGN 
COUNTRY HAS AN EXTRATERRITORIAL TAX OR DIS-
CRIMINATORY TAX.—For purposes of this section, a 
foreign country shall be treated as having an 
extraterritorial tax or discriminatory tax during the 
period— 
‘‘(A) beginning on the earlier of the date 
on which such tax is enacted or takes effect, 
and 
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‘‘(B) ending on the later of the date on 
which the permanent repeal or termination of 
such tax is enacted or takes effect. 
‘‘(b) ENGAGEMENT WITH TRADING PARTNERS ON 
EXTRATERRITORIAL
TAXES
AND
DISCRIMINATORY 
TAXES.—The Secretary shall commence enhanced bilat-
eral engagement with each foreign country included in the 
report submitted under subsection (a), in order to, as ap-
propriate— 
‘‘(1) express the concern of the United States 
with respect to the adverse trade and economic ef-
fects of tax policies that violate bilateral tax treaties 
and international tax norms, 
‘‘(2) urge repeal of extraterritorial taxes and 
discriminatory taxes that target United States per-
sons, and 
‘‘(3) advise such foreign country of the remedial 
actions under subsection (c). 
‘‘(c) REMEDIAL ACTIONS.— 
‘‘(1) INCREASED
RATE
OF
TAX
ON
FOREIGN 
CITIZENS AND FOREIGN CORPORATIONS.— 
‘‘(A) INCOME TAXES.— 
‘‘(i) IN GENERAL.—In the case of any 
applicable person for any taxable year be-
ginning after the applicable date, each 
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specified rate of income tax shall be in-
creased by the applicable number of per-
centage points. 
‘‘(ii) SPECIFIED
RATE
OF
INCOME 
TAX.—For purposes of this subparagraph, 
the term ‘specified rate of income tax’ 
means— 
‘‘(I) the rates of tax specified in 
paragraphs (1) and (2) of section 
871(a), 
‘‘(II) in the case of any applica-
ble person to which section 871(b) ap-
plies, each rate of tax in effect under 
section 1, 
‘‘(III) the rate of tax specified in 
section 881(a), 
‘‘(IV) in the case of any applica-
ble person to which section 882(a) ap-
plies, the rate of tax specified in sec-
tion 11(b), and 
‘‘(V) the rate of tax specified in 
section 884(a). 
‘‘(iii) APPLICATION
OF
INCREASED 
RATES TO EFFECTIVELY CONNECTED IN-
COME
OF
NONRESIDENT
ALIEN
INDIVID-
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UALS
LIMITED
TO
GAINS
ON
UNITED 
STATES REAL PROPERTY INTERESTS.—In 
the case of any individual to whom clause 
(i) applies, the tax imposed under section 
1 on such individual (after application of 
clause (ii)(II)) shall be reduced (but not 
below zero) by the excess of— 
‘‘(I) the tax which would be im-
posed under such section (after appli-
cation of clause (ii)(II)) if FIRPTA 
items were not taken into account, 
over 
‘‘(II) the tax which would be im-
posed under such section if FIRPTA 
items were not taken into account, 
and clause (ii)(II) did not apply. 
For purposes of this clause, the term 
‘FIRPTA items’ means gains and losses 
taken into account under section 871(b)(1) 
by reason of section 897(a)(1)(A). 
‘‘(B) WITHHOLDING TAXES.— 
‘‘(i) IN GENERAL.—In the case of any 
payment to an applicable person after the 
applicable date, the rate of tax specified in 
sections 1441(a) and 1442(a) (other than 
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the 14 percent rate of tax specified in sec-
tion 1441(a)) shall each be— 
‘‘(I) notwithstanding sections 894 
and 7852(d), determined without re-
gard to any treaty obligation of the 
United States, and 
‘‘(II) increased by the applicable 
number of percentage points. 
‘‘(ii) DISPOSITION OF UNITED STATES 
REAL PROPERTY INTERESTS.—In the case 
of any disposition of a United States real 
property interest (as defined in section 
897(c)) by an applicable person after the 
applicable date, the rate of tax specified in 
section 1445(a) shall be— 
‘‘(I) notwithstanding sections 894 
and 7852(d), determined without re-
gard to any treaty obligation of the 
United States, and 
‘‘(II) increased by the applicable 
number of percentage points. 
‘‘(iii) OTHER DISPOSITIONS AND DIS-
TRIBUTIONS RELATED TO UNITED STATES 
REAL PROPERTY INTERESTS.—In the case 
of any disposition or distribution described 
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‘‘(V) in the case of section 
1445(e)(5), the Secretary issues regu-
lations or other guidance providing for 
such increase, and 
‘‘(VI) in the case of section 
1445(e)(6), the nonresident alien indi-
vidual or foreign corporation referred 
to in such section is an applicable per-
son. 
‘‘(C) APPLICABLE PERSON.—For purposes 
of this paragraph, the term ‘applicable person’ 
means— 
‘‘(i) any individual (other than a cit-
izen or resident of the United States) who 
is a citizen of a foreign country listed in a 
report under subsection (a), 
‘‘(ii) any foreign corporation (other 
than a specified 10-percent owned foreign 
corporation, as defined in section 245A(b)) 
which is created or organized in such a 
foreign country or subject to the income 
tax laws of such foreign country, and 
‘‘(iii) in the case of the application of 
subparagraph (B)(i) with respect to section 
1441(a), foreign partnerships to the extent 
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period described in subclause (II), 15 
percentage points, and 
‘‘(IV) with respect to any time 
after the close of the period described 
in subclause (III), 20 percentage 
points. 
‘‘(ii) 
APPLICATION
TO
TAXABLE 
YEARS.—For purposes of subparagraph 
(A), the applicable number of percentage 
points shall be determined with respect to 
the date on which the taxable year begins. 
‘‘(iii) APPLICATION TO WITHHOLDING 
TAXES.—For purposes of subparagraph 
(B), the applicable number of percentage 
points shall be determined with respect to 
the date of the payment or disposition, as 
the case may be. 
‘‘(F) EFFECT OF PERMANENT REPEAL OR 
TERMINATION OF EXTRATERRITORIAL AND DIS-
CRIMINATORY TAXES.—If the Secretary deter-
mines under subsection (a)(2)(B)(ii) that any 
foreign 
country 
no 
longer 
has 
any 
extraterritorial or discriminatory taxes, then in 
the case of any taxable year beginning, or pay-
ment or disposition made, after the date of the 
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submission of the report which includes such 
determination, this section shall be applied with 
respect to such foreign country by not taking 
into account any report submitted before such 
date. 
‘‘(2) OTHER REMEDIES.— 
‘‘(A) PROCUREMENT.— 
‘‘(i) IN
GENERAL.—The President 
may prohibit the Federal Government from 
procuring, or entering into any contract for 
the procurement of, goods or services from 
applicable persons during the period begin-
ning on the applicable date and ending on 
the date of any determination described in 
paragraph (1)(F) by the Secretary with re-
spect to such foreign country. 
‘‘(ii) 
CONGRESSIONAL
NOTIFICA-
TION.—If the President takes any action 
described in clause (i), the President shall, 
not later than 30 days after the date of 
such action, notify the appropriate commit-
tees of Congress of such action. 
‘‘(B) TAX TREATIES.— 
‘‘(i) IN
GENERAL.—The Secretary 
shall take into account the extraterritorial 
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taxes and discriminatory taxes of any for-
eign country in assessing whether to enter 
into a bilateral tax treaty with such foreign 
country or to participate in negotiations 
with respect to updating a bilateral tax 
treaty with such foreign country. 
‘‘(ii) 
CONGRESSIONAL
NOTIFICA-
TION.—If the Secretary begins negotia-
tions with respect to entering into or up-
dating any bilateral tax treaty with any 
foreign country that imposes one or more 
extraterritorial or discriminatory taxes, the 
Secretary shall, not later than 30 days 
after beginning such negotiations, notify 
the appropriate committees of Congress of 
such action. Such notification shall include 
a description of the manner in which such 
taxes are being taken into account as re-
quired under clause (i). 
‘‘(C) TRADE AGREEMENTS.— 
‘‘(i) IN GENERAL.—The United States 
Trade Representative and the Secretary of 
Commerce shall each take into account the 
extraterritorial taxes and discriminatory 
taxes of any foreign government in assess-
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ing whether to enter into any free trade 
agreement or Executive agreement on 
trade with such foreign country. 
‘‘(ii) 
CONGRESSIONAL
NOTIFICA-
TION.—If the United States Trade Rep-
resentative or the Secretary of Commerce 
begins negotiations with respect to enter-
ing into any free trade agreement or Exec-
utive agreement on trade with any foreign 
country 
that 
imposes 
one 
or 
more 
extraterritorial or discriminatory taxes, the 
United States Trade Representative or the 
Secretary of Commerce (as the case may 
be) shall, not later than 30 days after be-
ginning such negotiations, notify the ap-
propriate committees of Congress of such 
action. Such notification shall include a de-
scription of the manner in which such 
taxes are being taken into account as re-
quired under clause (i). 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) EXTRATERRITORIAL TAX.— 
‘‘(A) 
IN
GENERAL.—The 
term 
‘extraterritorial tax’ means any tax imposed by 
a foreign country on a corporation (including 
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any trade or business of such corporation) 
which is determined by reference to any income 
or profits received by any person (including any 
trade or business of any person) by reason of 
such person being connected to such corpora-
tion through any chain of ownership, deter-
mined without regard to the ownership interests 
of any individual, and other than by reason of 
such corporation having a direct or indirect 
ownership interest in such person. 
‘‘(B) TAX.—The term ‘tax’ includes any 
increase in tax whether effectuated by an in-
crease in the rate or base of a tax, by a denial 
of deductions or credits, or otherwise. 
‘‘(2) DISCRIMINATORY TAX.— 
‘‘(A) IN GENERAL.—Except as otherwise 
provided in subparagraph (B), the term ‘dis-
criminatory tax’ means any tax imposed by a 
foreign country if— 
‘‘(i) such tax applies to items of in-
come that would not be considered to be 
from sources within the foreign country 
under the rules of part I of this subchapter 
if such part were applied by treating such 
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foreign country as though it were the 
United States, 
‘‘(ii) such tax is imposed on a base 
other than net income and is not computed 
by permitting recovery of costs and ex-
penses, 
‘‘(iii) such tax is exclusively or pre-
dominantly applicable, in practice or by its 
terms, to nonresident individuals and for-
eign corporations or partnerships (as de-
termined under rules similar to paragraphs 
(4) and (5) of section 7701(a) by treating 
the foreign country as though it were the 
United States) because of the application 
of revenue thresholds, exemptions or exclu-
sions for taxpayers subject to such foreign 
country’s corporate income tax, or restric-
tions of scope that ensure that substan-
tially all residents (other than foreign cor-
porations and partnerships (as so deter-
mined)) supplying comparable goods or 
services are excluded from the application 
of such tax, or 
‘‘(iv) such tax is not treated as an in-
come tax under the laws of such foreign 
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country or is otherwise treated by such for-
eign country as outside the scope of any 
agreements that are in force between such 
foreign country and one or more other ju-
risdictions for the avoidance of double tax-
ation with respect to taxes on income. 
‘‘(B) EXCEPTIONS.—Except as otherwise 
provided by the Secretary, the term ‘discrimina-
tory taxes’ shall not include any generally appli-
cable tax which constitutes— 
‘‘(i) a withholding tax on amounts de-
scribed in sections 871(a)(1) and 881(a), 
‘‘(ii) a value added tax, goods and 
services tax, sales tax, or other similar tax 
on consumption, 
‘‘(iii) a tax imposed with respect to 
transactions on a per-unit or per-trans-
action basis rather than on an ad valorem 
basis, 
‘‘(iv) a tax on real or personal prop-
erty, or 
‘‘(v) any other similar tax identified 
by the Secretary for purposes of this sub-
paragraph. 
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‘‘(3) FOREIGN
COUNTRY.—The term ‘foreign 
country’ means a foreign country or a dependent 
territory or possession of a foreign country. Such 
term does not include any possession of the United 
States. 
‘‘(4) APPROPRIATE
COMMITTEES
OF
CON-
GRESS.—The term ‘appropriate committees of Con-
gress’ means— 
‘‘(A) the Committee on Finance and the 
Committee on Foreign Relations of the Senate, 
and 
‘‘(B) the Committee on Foreign Affairs 
and the Committee on Ways and Means of the 
House of Representatives. 
‘‘(5) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Treasury or the Secretary’s del-
egate. 
‘‘(e) REGULATIONS
AND OTHER GUIDANCE.—The 
Secretary may issue such regulations or other guidance 
as may be necessary or appropriate to carry out the pur-
poses of this section, including regulations or other guid-
ance which provide for such adjustments to the application 
of this section as are necessary to prevent the avoidance 
of the purposes of this section.’’. 
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(b) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part II of subchapter N of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 899. Enforcement of remedies against extraterritorial taxes and discrimi-
natory taxes.’’. 
Æ 
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