I 
119TH CONGRESS 
1ST SESSION H. R. 2423 
To amend the Internal Revenue Code of 1986 to modify the application 
of the base erosion and anti-abuse tax with respect to certain entities 
connected to jurisdictions which have implemented an extraterritorial 
tax. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 27, 2025 
Mr. ESTES (for himself, Mr. BUCHANAN, Mr. SMITH of Nebraska, Mr. KELLY 
of Pennsylvania, Mr. SCHWEIKERT, Mr. LAHOOD, Mr. ARRINGTON, 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 Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to modify 
the application of the base erosion and anti-abuse tax 
with respect to certain entities connected to jurisdictions 
which have implemented an extraterritorial tax. 
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 ‘‘Unfair Tax Prevention 
Act’’. 
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SEC. 2. APPLICATION OF THE BASE EROSION AND ANTI- 
ABUSE TAX WITH RESPECT TO CERTAIN EN-
TITIES CONNECTED TO EXTRATERRITORIAL 
TAX JURISDICTIONS. 
(a) IN GENERAL.—Section 59A of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
(i) as subsection (j) and inserting after subsection (h) the 
following new subsection: 
‘‘(i) 
SPECIAL
RULES
FOR
FOREIGN-OWNED 
EXTRATERRITORIAL TAX REGIME ENTITIES.— 
‘‘(1) IN GENERAL.—In the case of any foreign- 
owned extraterritorial tax regime entity— 
‘‘(A) such entity shall be treated as de-
scribed in subparagraphs (B) and (C) of sub-
section (e)(1) for purposes of determining 
whether such entity is an applicable taxpayer, 
‘‘(B) subsection (b)(2) shall be applied by 
substituting ‘the date of the enactment of sub-
section (i)’ for ‘December 31, 2025’, 
‘‘(C) subsections (c)(2)(B), (c)(4)(B)(ii), 
and (d)(5) shall not apply, and 
‘‘(D) 50 percent of such entity’s cost of 
goods sold shall be treated as a base erosion tax 
benefit with respect to a base erosion payment. 
‘‘(2) FOREIGN-OWNED EXTRATERRITORIAL TAX 
REGIME ENTITY.—For purposes of this subsection— 
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‘‘(A) IN
GENERAL.—The term ‘foreign- 
owned extraterritorial tax regime entity’ means 
any taxpayer which is controlled by a foreign 
entity (other than a foreign entity controlled by 
any domestic corporation) if an extraterritorial 
tax is imposed on any of the following entities: 
‘‘(i) Any foreign entity which controls 
the taxpayer. 
‘‘(ii) Any foreign entity which is con-
trolled by— 
‘‘(I) the taxpayer, or 
‘‘(II) any foreign entity described 
in clause (i). 
‘‘(iii) Any trade or business of any 
foreign entity described in clause (i) or (ii). 
‘‘(B) EXTRATERRITORIAL TAX.— 
‘‘(i) 
IN
GENERAL.—The 
term 
‘extraterritorial tax’ means any tax im-
posed by a foreign country on a corpora-
tion (including 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 busi-
ness of any person) by reason of such per-
son being connected to such corporation 
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through any chain of ownership, deter-
mined without regard to the ownership in-
terests of any individual, and other than by 
reason of such corporation having a direct 
or indirect ownership interest in such per-
son. 
‘‘(ii) TAX.—The term ‘tax’ includes 
any increase in tax whether effectuated by 
an increase in the rate or base of a tax, by 
a denial of deductions or credits, or other-
wise. 
‘‘(C) FOREIGN ENTITY.—The term ‘foreign 
entity’ means any foreign person other than an 
individual. 
‘‘(D) CONTROL.—Control has the same 
meaning 
given 
such 
term 
under 
section 
954(d)(3).’’. 
(b) EFFECTIVE DATE.—The amendment made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
Æ 
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