I 
116TH CONGRESS 
1ST SESSION H. R. 1712 
To end offshore corporate tax avoidance, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 13, 2019 
Mr. DOGGETT (for himself, Mr. BLUMENAUER, Mr. CARTWRIGHT, Ms. JUDY 
CHU of California, Mr. COHEN, Mr. COURTNEY, Mr. DANNY K. DAVIS 
of Illinois, Mr. DEFAZIO, Ms. DELAURO, Mr. DEUTCH, Mr. GARAMENDI, 
Mr. GRIJALVA, Mr. HIGGINS of New York, Mr. HUFFMAN, Ms. JAYAPAL, 
Ms. JOHNSON of Texas, Mr. JOHNSON of Georgia, Ms. KAPTUR, Ms. 
KELLY of Illinois, Mr. LANGEVIN, Mr. LARSON of Connecticut, Ms. LEE 
of California, Mr. TED LIEU of California, Mr. LOEBSACK, Mr. LYNCH, 
Mr. MCGOVERN, Ms. MOORE, Mr. NADLER, Mrs. NAPOLITANO, Ms. NOR-
TON, Ms. OCASIO-CORTEZ, Ms. PINGREE, Mr. RASKIN, Mr. RUSH, Mr. 
RYAN, Mr. SARBANES, Ms. SCHAKOWSKY, Mr. TAKANO, Ms. TLAIB, Mr. 
TONKO, Mrs. WATSON COLEMAN, Ms. WILD, Mr. YARMUTH, Mr. LEWIS, 
and Mr. GARCI´A of Illinois) introduced the following bill; which was re-
ferred to the Committee on Ways and Means, and in addition to the 
Committee on Financial Services, 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 end offshore corporate tax avoidance, and for other 
purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Stop Tax Haven Abuse Act’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title, etc. 
TITLE I—ENDING CORPORATE OFFSHORE TAX AVOIDANCE 
Sec. 101. Repeal of check-the-box rules for certain foreign entities and CFC 
look-thru rules. 
Sec. 102. Limitation on deduction of interest by domestic corporations which 
are members of an international financial reporting group. 
Sec. 103. Treatment of foreign corporations managed and controlled in the 
United States as domestic corporations. 
Sec. 104. Swap payments made from the United States to persons offshore. 
Sec. 105. Modifications to rules relating to inverted corporations. 
Sec. 106. Requirement to disclose total corporate taxes paid. 
Sec. 107. Penalty for election to pay tax on deferred foreign income in install-
ments. 
TITLE II—ADDITIONAL MEASURES TO COMBAT TAX EVASION 
Sec. 201. Authorizing special measures against foreign jurisdictions, financial 
institutions, and others that significantly impede United States 
tax enforcement. 
Sec. 202. Strengthening the Foreign Account Tax Compliance Act (FATCA). 
Sec. 203. Reporting United States beneficial owners of foreign owned financial 
accounts. 
Sec. 204. Penalty for failing to disclose offshore holdings. 
Sec. 205. Deadline for anti-money laundering rule for investment advisers. 
Sec. 206. Anti-money laundering requirements for formation agents. 
Sec. 207. Strengthening John Doe summons proceedings. 
Sec. 208. Improving enforcement of foreign financial account reporting. 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6211
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
TITLE I—ENDING CORPORATE 
OFFSHORE TAX AVOIDANCE 
SEC. 101. REPEAL OF CHECK-THE-BOX RULES FOR CERTAIN 
FOREIGN ENTITIES AND CFC LOOK-THRU 
RULES. 
(a) CHECK-THE-BOX RULES.—Paragraph (3) of sec-
tion 7701(a) is amended— 
(1) by striking ‘‘and’’, and 
(2) by inserting after ‘‘insurance companies’’ 
the following: ‘‘, and any foreign business entity 
that— 
‘‘(A) has a single owner that does not have 
limited liability, or 
‘‘(B) has one or more members all of 
which have limited liability’’. 
(b) LOOK-THRU RULE.—Subparagraph (C) of sec-
tion 954(c)(6) is amended to read as follows: 
‘‘(C) TERMINATION.—Subparagraph (A) 
shall not apply to dividends, interest, rents, and 
royalties received or accrued after the date of 
the enactment of the Stop Tax Haven Abuse 
Act.’’. 
(c) EFFECTIVE DATE.— 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
(1) The amendments made by subsection (a) 
shall take effect on the date of the enactment of this 
Act. 
(2) The amendment made by subsection (b) 
shall apply to payments received after the date of 
the enactment of this Act. 
SEC. 102. LIMITATION ON DEDUCTION OF INTEREST BY DO-
MESTIC CORPORATIONS WHICH ARE MEM-
BERS OF AN INTERNATIONAL FINANCIAL RE-
PORTING GROUP. 
(a) IN GENERAL.—Section 163 is amended by redes-
ignating subsection (n) as subsection (p) and by inserting 
after subsection (m) the following new subsection: 
‘‘(n) LIMITATION ON DEDUCTION OF INTEREST BY 
DOMESTIC CORPORATIONS
IN INTERNATIONAL FINAN-
CIAL REPORTING GROUPS.— 
‘‘(1) IN GENERAL.—In the case of any domestic 
corporation which is a member of any international 
financial reporting group, the deduction under this 
chapter for interest paid or accrued during the tax-
able year shall not exceed the sum of— 
‘‘(A) the allowable percentage of 110 per-
cent of the excess (if any) of— 
‘‘(i) the amount of such interest so 
paid or accrued, over 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00004
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(ii) the amount described in subpara-
graph (B), plus 
‘‘(B) the amount of interest includible in 
gross income of such corporation for such tax-
able year. 
‘‘(2) INTERNATIONAL
FINANCIAL
REPORTING 
GROUP.— 
‘‘(A) For purposes of this subsection, the 
term ‘international financial reporting group’ 
means, with respect to any reporting year, any 
group of entities which— 
‘‘(i) includes— 
‘‘(I) at least one foreign corpora-
tion engaged in a trade or business 
within the United States, or 
‘‘(II) at least one domestic cor-
poration and one foreign corporation, 
‘‘(ii) prepares consolidated financial 
statements with respect to such year, and 
‘‘(iii) reports in such statements aver-
age annual gross receipts (determined in 
the aggregate with respect to all entities 
which are part of such group) for the 3-re-
porting-year period ending with such re-
porting year in excess of $100,000,000. 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00005
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(B) RULES
RELATING
TO
DETERMINA-
TION OF AVERAGE GROSS RECEIPTS.—For pur-
poses of subparagraph (A)(iii), rules similar to 
the rules of section 448(c)(3) shall apply. 
‘‘(3) ALLOWABLE PERCENTAGE.—For purposes 
of this subsection— 
‘‘(A) IN
GENERAL.—The term ‘allowable 
percentage’ means, with respect to any domestic 
corporation for any taxable year, the ratio (ex-
pressed as a percentage and not greater than 
100 percent) of— 
‘‘(i) such corporation’s allocable share 
of the international financial reporting 
group’s reported net interest expense for 
the reporting year of such group which 
ends in or with such taxable year of such 
corporation, over 
‘‘(ii) such corporation’s reported net 
interest expense for such reporting year of 
such group. 
‘‘(B) 
REPORTED
NET
INTEREST
EX-
PENSE.—The term ‘reported net interest ex-
pense’ means— 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00006
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(i) with respect to any international 
financial reporting group for any reporting 
year, the excess of— 
‘‘(I) the aggregate amount of in-
terest 
expense 
reported 
in 
such 
group’s consolidated financial state-
ments for such taxable year, over 
‘‘(II) the aggregate amount of in-
terest income reported in such group’s 
consolidated financial statements for 
such taxable year, and 
‘‘(ii) with respect to any domestic cor-
poration for any reporting year, the excess 
of— 
‘‘(I) the amount of interest ex-
pense of such corporation reported in 
the books and records of the inter-
national financial reporting group 
which are used in preparing such 
group’s consolidated financial state-
ments for such taxable year, over 
‘‘(II) the amount of interest in-
come of such corporation reported in 
such books and records. 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00007
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(C) ALLOCABLE
SHARE
OF
REPORTED 
NET INTEREST EXPENSE.—With respect to any 
domestic corporation which is a member of any 
international financial reporting group, such 
corporation’s allocable share of such group’s re-
ported net interest expense for any reporting 
year is the portion of such expense which bears 
the same ratio to such expense as— 
‘‘(i) the EBITDA of such corporation 
for such reporting year, bears to 
‘‘(ii) the EBITDA of such group for 
such reporting year. 
‘‘(D) EBITDA.— 
‘‘(i) 
IN
GENERAL.—The 
term 
‘EBITDA’ means, with respect to any re-
porting year, earnings before interest, 
taxes, depreciation, and amortization— 
‘‘(I) as determined in the inter-
national financial reporting group’s 
consolidated financial statements for 
such year, or 
‘‘(II) for purposes of subpara-
graph (A)(i), as determined in the 
books and records of the international 
financial reporting group which are 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00008
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
paragraph (1) shall be applied without re-
gard to subparagraph (A) thereof. 
‘‘(4) CONSOLIDATED FINANCIAL STATEMENT.— 
For purposes of this subsection, the term ‘consoli-
dated financial statement’ means any consolidated 
financial statement described in paragraph (2)(A)(ii) 
if such statement is— 
‘‘(A) a financial statement which is cer-
tified as being prepared in accordance with gen-
erally accepted accounting principles, inter-
national financial reporting standards, or any 
other comparable method of accounting identi-
fied by the Secretary, and which is— 
‘‘(i) a 10–K (or successor form), or 
annual statement to shareholders, required 
to be filed with the United States Securi-
ties and Exchange Commission, 
‘‘(ii) an audited financial statement 
which is used for— 
‘‘(I) credit purposes, 
‘‘(II) reporting to shareholders, 
partners, or other proprietors, or to 
beneficiaries, or 
‘‘(III) 
any 
other 
substantial 
nontax purpose, 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
but only if there is no statement described 
in clause (i), or 
‘‘(iii) filed with any other Federal or 
State agency for nontax purposes, but only 
if there is no statement described in clause 
(i) or (ii), or 
‘‘(B) a financial statement which— 
‘‘(i) is used for a purpose described in 
subclause (I), (II), or (III) of subpara-
graph (A)(ii), or 
‘‘(ii) filed with any regulatory or gov-
ernmental body (whether domestic or for-
eign) specified by the Secretary, 
but only if there is no statement described in 
subparagraph (A). 
‘‘(5) REPORTING YEAR.—For purposes of this 
subsection, the term ‘reporting year’ means, with re-
spect to any international financial reporting group, 
the year with respect to which the consolidated fi-
nancial statements are prepared. 
‘‘(6) APPLICATION TO CERTAIN ENTITIES.— 
‘‘(A) PARTNERSHIPS.—Except as other-
wise provided by the Secretary in paragraph 
(7), this subsection and subsection (o) shall 
apply to any partnership which is a member of 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
any international financial reporting group 
under rules similar to the rules of section 
163(j)(4). 
‘‘(B) FOREIGN
CORPORATIONS
ENGAGED 
IN TRADE OR BUSINESS WITHIN THE UNITED 
STATES.—Except as otherwise provided by the 
Secretary in paragraph (7), any deduction for 
interest paid or accrued by a foreign corpora-
tion engaged in a trade or business within the 
United States shall be limited in a manner con-
sistent with the principles of this subsection. 
‘‘(C) CONSOLIDATED
GROUPS.—For pur-
poses of this subsection, the members of any 
group that file (or are required to file) a con-
solidated return with respect to the tax imposed 
by chapter 1 for a taxable year shall be treated 
as a single corporation. 
‘‘(7) REGULATIONS.—The Secretary may issue 
such regulations or other guidance as are necessary 
or appropriate to carry out the purposes of this sub-
section.’’. 
(b) CARRYFORWARD OF DISALLOWED INTEREST.— 
(1) IN GENERAL.—Section 163 is amended by 
inserting after subsection (n), as added by sub-
section (a), the following new subsection: 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(o) CARRYFORWARD OF CERTAIN DISALLOWED IN-
TEREST.—The amount of any interest not allowed as a 
deduction for any taxable year by reason of subsection 
(j)(1) or (n)(1) (whichever imposes the lower limitation 
with respect to such taxable year) shall be treated as inter-
est (and as business interest for purposes of subsection 
(j)(1)) paid or accrued in the succeeding taxable year. In-
terest paid or accrued in any taxable year (determined 
without regard to the preceding sentence) shall not be car-
ried past the fifth taxable year following such taxable year, 
determined by treating interest as allowed as a deduction 
on a first-in, first-out basis.’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 163(j)(2) is amended to read 
as follows: 
‘‘(2) CARRYFORWARD CROSS-REFERENCE.—For 
carryforward treatment, see subsection (o).’’. 
(B) Section 163(j)(4)(B)(i)(I) is amended 
by striking ‘‘paragraph (2)’’ and inserting ‘‘sub-
section (o)’’. 
(C) Section 381(c)(20) is amended to read 
as follows: 
‘‘(20) CARRYFORWARD OF DISALLOWED INTER-
EST.—The carryover of disallowed interest described 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
in section 163(o) to taxable years ending after the 
date of distribution or transfer.’’. 
(D) Section 382(d)(3) is amended to read 
as follows: 
‘‘(3) APPLICATION TO CARRYFORWARD OF DIS-
ALLOWED
INTEREST.—The term ‘pre-change loss’ 
shall include any carryover of disallowed interest de-
scribed in section 163(o) under rules similar to the 
rules of paragraph (1).’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2018. 
SEC. 103. TREATMENT OF FOREIGN CORPORATIONS MAN-
AGED AND CONTROLLED IN THE UNITED 
STATES AS DOMESTIC CORPORATIONS. 
(a) IN GENERAL.—Section 7701 is amended by re-
designating subsection (p) as subsection (q) and by insert-
ing after subsection (o) the following new subsection: 
‘‘(p) CERTAIN CORPORATIONS MANAGED AND CON-
TROLLED IN THE UNITED STATES TREATED AS DOMES-
TIC FOR INCOME TAX.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a)(4), in the case of a corporation described in 
paragraph (2) if— 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(A) the corporation would not otherwise 
be treated as a domestic corporation for pur-
poses of this title, but 
‘‘(B) the management and control of the 
corporation occurs, directly or indirectly, pri-
marily within the United States, 
then, solely for purposes of chapter 1 (and any other 
provision of this title relating to chapter 1), the cor-
poration shall be treated as a domestic corporation. 
‘‘(2) CORPORATION DESCRIBED.— 
‘‘(A) IN GENERAL.—A corporation is de-
scribed in this paragraph if— 
‘‘(i) the stock of such corporation is 
regularly traded on an established securi-
ties market, or 
‘‘(ii) the aggregate gross assets of 
such corporation (or any predecessor there-
of), including assets under management 
for investors, whether held directly or indi-
rectly, at any time during the taxable year 
or 
any 
preceding 
taxable 
year 
is 
$50,000,000 or more. 
‘‘(B) GENERAL
EXCEPTION.—A corpora-
tion shall not be treated as described in this 
paragraph if— 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
‘‘(i) such corporation was treated as a 
corporation described in this paragraph in 
a preceding taxable year, 
‘‘(ii) such corporation— 
‘‘(I) is not regularly traded on an 
established securities market, and 
‘‘(II) has, and is reasonably ex-
pected to continue to have, aggregate 
gross assets (including assets under 
management for investors, whether 
held directly or indirectly) of less than 
$50,000,000, and 
‘‘(iii) the Secretary grants a waiver to 
such corporation under this subparagraph. 
‘‘(3) MANAGEMENT AND CONTROL.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
prescribe regulations for purposes of deter-
mining cases in which the management and 
control of a corporation is to be treated as oc-
curring primarily within the United States. 
‘‘(B) EXECUTIVE OFFICERS AND SENIOR 
MANAGEMENT.—Such regulations shall provide 
that— 
‘‘(i) the management and control of a 
corporation shall be treated as occurring 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
primarily within the United States if sub-
stantially all of the executive officers and 
senior management of the corporation who 
exercise day-to-day responsibility for mak-
ing decisions involving strategic, financial, 
and operational policies of the corporation 
are located primarily within the United 
States, and 
‘‘(ii) individuals who are not executive 
officers and senior management of the cor-
poration (including individuals who are of-
ficers or employees of other corporations in 
the same chain of corporations as the cor-
poration) shall be treated as executive offi-
cers and senior management if such indi-
viduals exercise the day-to-day responsibil-
ities of the corporation described in clause 
(i). 
‘‘(C) CORPORATIONS PRIMARILY HOLDING 
INVESTMENT
ASSETS.—Such regulations shall 
also provide that the management and control 
of a corporation shall be treated as occurring 
primarily within the United States if— 
‘‘(i) the assets of such corporation (di-
rectly or indirectly) consist primarily of as-
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
sets being managed on behalf of investors, 
and 
‘‘(ii) decisions about how to invest the 
assets are made in the United States.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning on or 
after the date which is 2 years after the date of the enact-
ment of this Act, whether or not regulations are issued 
under section 7701(p)(3) of the Internal Revenue Code 
of 1986, as added by this section. 
SEC. 104. SWAP PAYMENTS MADE FROM THE UNITED 
STATES TO PERSONS OFFSHORE. 
(a) TAX ON SWAP PAYMENTS RECEIVED BY FOR-
EIGN PERSONS.—Section 871(a)(1) is amended— 
(1) by inserting ‘‘swap payments (as identified 
in section 1256(b)(2)(B)),’’ after ‘‘annuities,’’ in 
subparagraph (A), and 
(2) by adding at the end the following new sen-
tence: ‘‘In the case of swap payments, the source of 
a swap payment is determined by reference to the lo-
cation of the payor.’’. 
(b) TAX ON SWAP PAYMENTS RECEIVED BY FOR-
EIGN CORPORATIONS.—Section 881(a) is amended— 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
(1) by inserting ‘‘swap payments (as identified 
in section 1256(b)(2)(B)),’’ after ‘‘annuities,’’ in 
paragraph (1), and 
(2) by adding at the end the following new sen-
tence: ‘‘In the case of swap payments, the source of 
a swap payment is determined by reference to the lo-
cation of the payor.’’. 
SEC. 105. MODIFICATIONS TO RULES RELATING TO IN-
VERTED CORPORATIONS. 
(a) IN GENERAL.—Subsection (b) of section 7874 is 
amended to read as follows: 
‘‘(b) INVERTED CORPORATIONS TREATED AS DO-
MESTIC CORPORATIONS.— 
‘‘(1) IN
GENERAL.—Notwithstanding section 
7701(a)(4), a foreign corporation shall be treated for 
purposes of this title as a domestic corporation if— 
‘‘(A) such corporation would be a surro-
gate foreign corporation if subsection (a)(2) 
were applied by substituting ‘80 percent’ for 
‘60 percent’, or 
‘‘(B) such corporation is an inverted do-
mestic corporation. 
‘‘(2) INVERTED DOMESTIC CORPORATION.—For 
purposes of this subsection, a foreign corporation 
shall be treated as an inverted domestic corporation 
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00019
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
if, pursuant to a plan (or a series of related trans-
actions)— 
‘‘(A) the entity completes after December 
22, 2017, the direct or indirect acquisition of— 
‘‘(i) substantially all of the properties 
held directly or indirectly by a domestic 
corporation, or 
‘‘(ii) substantially all of the assets of, 
or substantially all of the properties consti-
tuting a trade or business of, a domestic 
partnership, and 
‘‘(B) after the acquisition, either— 
‘‘(i) more than 50 percent of the stock 
(by vote or value) of the entity is held— 
‘‘(I) in the case of an acquisition 
with respect to a domestic corpora-
tion, by former shareholders of the 
domestic corporation by reason of 
holding stock in the domestic corpora-
tion, or 
‘‘(II) in the case of an acquisition 
with respect to a domestic partner-
ship, by former partners of the do-
mestic partnership by reason of hold-
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00020
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS
ing a capital or profits interest in the 
domestic partnership, or 
‘‘(ii) the management and control of 
the expanded affiliated group which in-
cludes the entity occurs, directly or indi-
rectly, primarily within the United States, 
and such expanded affiliated group has 
significant domestic business activities. 
‘‘(3) EXCEPTION
FOR
CORPORATIONS
WITH 
SUBSTANTIAL
BUSINESS
ACTIVITIES
IN
FOREIGN 
COUNTRY OF ORGANIZATION.—A foreign corporation 
described in paragraph (2) shall not be treated as an 
inverted domestic corporation if after the acquisition 
the expanded affiliated group which includes the en-
tity has substantial business activities in the foreign 
country in which or under the law of which the enti-
ty is created or organized when compared to the 
total business activities of such expanded affiliated 
group. For purposes of subsection (a)(2)(B)(iii) and 
the preceding sentence, the term ‘substantial busi-
ness activities’ shall have the meaning given such 
term under regulations in effect on December 22, 
2017, except that the Secretary may issue regula-
tions increasing the threshold percent in any of the 
tests under such regulations for determining if busi-
VerDate Sep 11 2014 
18:14 Mar 28, 2019
Jkt 089200
PO 00000
Frm 00021
Fmt 6652
Sfmt 6201
E:\BILLS\H1712.IH
H1712
pamtmann on DSKBFK8HB2PROD with BILLS