I 
118TH CONGRESS 
1ST SESSION H. R. 3665 
To provide an enforcement of remedies against the extraterritorial taxes 
and discriminatory taxes of foreign countries. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 25, 2023 
Mr. SMITH of Missouri (for himself, Mr. BUCHANAN, Mr. SMITH of Nebraska, 
Mr. KELLY of Pennsylvania, Mr. SCHWEIKERT, Mr. LAHOOD, Mr. 
WENSTRUP, Mr. ARRINGTON, Mr. FERGUSON, Mr. ESTES, Mr. 
SMUCKER, Mr. HERN, Mrs. MILLER of West Virginia, Mr. MURPHY, Mr. 
KUSTOFF, Mr. FITZPATRICK, Mr. STEUBE, Ms. TENNEY, Mrs. 
FISCHBACH, Mr. MOORE of Utah, Mrs. STEEL, Ms. VAN DUYNE, Mr. 
FEENSTRA, Ms. MALLIOTAKIS, and Mr. CAREY) introduced the following 
bill; which was referred to the Committee on Ways and Means, and in 
addition to the Committee on Oversight and Accountability, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation 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, each rate of tax in effect under 
section 11, 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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of such section is an applicable per-
son, 
‘‘(II) in the case of section 
1445(e)(2), the foreign corporation re-
ferred to in such section is an applica-
ble person, 
‘‘(III) in the case of section 
1445(e)(3), the foreign shareholder 
referred to in such section is an appli-
cable person, 
‘‘(IV) in the case of section 
1445(e)(4), the foreign person re-
ferred to in such section is an applica-
ble person, 
‘‘(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. 
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‘‘(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 
provided by the Secretary (and taking into 
account the rules of section 1441(d)). 
‘‘(D) APPLICABLE DATE.—For purposes of 
this paragraph. the term ‘applicable date’ 
means with respect to any foreign country, the 
day after the 180-day period beginning on the 
date of the submission of the first report under 
subsection (a) which lists such foreign country. 
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‘‘(E) APPLICABLE NUMBER OF PERCENT-
AGE
POINTS.—For purposes of this para-
graph— 
‘‘(i) IN GENERAL.—The term ‘applica-
ble number of percentage points’ means, 
with respect to any foreign country— 
‘‘(I) with respect to the 1-year 
period beginning on the applicable 
date with respect to such foreign 
country, 5 percentage points, 
‘‘(II) with respect to the 1-year 
period beginning with the close of the 
period described in subclause (I), 10 
percentage points, 
‘‘(III) with respect to the 1-year 
period beginning with the close of the 
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 
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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 
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 
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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 
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-
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