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-
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 
VerDate Sep 11 2014 
04:13 Jun 17, 2023
Jkt 039200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6201
E:\BILLS\H3665.IH
H3665
pbinns on DSKJLVW7X2PROD with $$_JOB
country 
that 
imposes 
one 
or 
more 
extraterritorial or discriminatory taxes, the 
United States Trade Representative or the 
Secretary of Commerce (as the case may 
be) shall, not later than 30 days after be-
ginning such negotiations, notify the ap-
propriate committees of Congress of such 
action. Such notification shall include a de-
scription of the manner in which such 
taxes are being taken into account as re-
quired under clause (i). 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) EXTRATERRITORIAL TAX.— 
‘‘(A) 
IN
GENERAL.—The 
term 
‘extraterritorial tax’ means any tax imposed by 
a foreign country on a corporation (including 
any trade or business of such corporation) 
which is determined by reference to any income 
or profits received by any person (including any 
trade or business of any person) by reason of 
such person being connected to such corpora-
tion through any chain of ownership, deter-
mined without regard to the ownership interests 
of any individual, and other than by reason of 
VerDate Sep 11 2014 
04:13 Jun 17, 2023
Jkt 039200
PO 00000
Frm 00014
Fmt 6652
Sfmt 6201
E:\BILLS\H3665.IH
H3665
pbinns on DSKJLVW7X2PROD with $$_JOB
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 
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-
VerDate Sep 11 2014 
04:13 Jun 17, 2023
Jkt 039200
PO 00000
Frm 00015
Fmt 6652
Sfmt 6201
E:\BILLS\H3665.IH
H3665
pbinns on DSKJLVW7X2PROD with $$_JOB
eign corporations or partnerships (as de-
termined under rules similar to paragraphs 
(4) and (5) of section 7701(a) by treating 
the foreign country as though it were the 
United States) because of the application 
of revenue thresholds, exemptions or exclu-
sions for taxpayers subject to such foreign 
country’s corporate income tax, or restric-
tions of scope that ensure that substan-
tially all residents (other than foreign cor-
porations and partnerships (as so deter-
mined)) supplying comparable goods or 
services are excluded from the application 
of such tax, or 
‘‘(iv) such tax is not treated as an in-
come tax under the laws of such foreign 
country or is otherwise treated by such for-
eign country as outside the scope of any 
agreements that are in force between such 
foreign country and one or more other ju-
risdictions for the avoidance of double tax-
ation with respect to taxes on income. 
‘‘(B) EXCEPTIONS.—Except as otherwise 
provided by the Secretary, the term ‘discrimina-
VerDate Sep 11 2014 
04:13 Jun 17, 2023
Jkt 039200
PO 00000
Frm 00016
Fmt 6652
Sfmt 6201
E:\BILLS\H3665.IH
H3665
pbinns on DSKJLVW7X2PROD with $$_JOB
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, or 
‘‘(iv) any other similar tax identified 
by the Secretary for purposes of this sub-
paragraph. 
‘‘(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 
VerDate Sep 11 2014 
04:13 Jun 17, 2023
Jkt 039200
PO 00000
Frm 00017
Fmt 6652
Sfmt 6201
E:\BILLS\H3665.IH
H3665
pbinns on DSKJLVW7X2PROD with $$_JOB
‘‘(B) the Committee on Foreign Affairs 
and the Committee on Ways and Means of the 
House of Representatives. 
‘‘(5) SECRETARY.—The term ‘Secretary’ means 
the Secretary of the Treasury or the Secretary’s del-
egate. 
‘‘(e) REGULATIONS
AND OTHER GUIDANCE.—The 
Secretary may issue such regulations or other guidance 
as may be necessary or appropriate to carry out the pur-
poses of this section, including regulations or other guid-
ance which provide for such adjustments to the application 
of this section as are necessary to prevent the avoidance 
of the purposes of this section.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part II of subchapter N of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 899. Enforcement of remedies against extraterritorial taxes and discrimi-
natory taxes.’’. 
Æ 
VerDate Sep 11 2014 
04:13 Jun 17, 2023
Jkt 039200
PO 00000
Frm 00018
Fmt 6652
Sfmt 6301
E:\BILLS\H3665.IH
H3665
pbinns on DSKJLVW7X2PROD with $$_JOB