Us Congress 2025-2026 Regular Session

Us Congress House Bill HB2423 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	I
2	2	119THCONGRESS
3	3	1
4	4	STSESSION H. R. 2423
5	5	To amend the Internal Revenue Code of 1986 to modify the application
6	6	of the base erosion and anti-abuse tax with respect to certain entities
7	7	connected to jurisdictions which have implemented an extraterritorial
8	8	tax.
9	9	IN THE HOUSE OF REPRESENTATIVES
10	10	MARCH27, 2025
11	11	Mr. E
12	12	STES(for himself, Mr. BUCHANAN, Mr. SMITHof Nebraska, Mr. KELLY
13	13	of Pennsylvania, Mr. S
14	14	CHWEIKERT, Mr. LAHOOD, Mr. ARRINGTON, Mr.
15	15	S
16	16	MUCKER, Mr. HERNof Oklahoma, Mrs. MILLERof West Virginia, Mr.
17	17	M
18	18	URPHY, Mr. KUSTOFF, Mr. FITZPATRICK, Mr. STEUBE, Ms. TENNEY,
19	19	Mrs. F
20	20	ISCHBACH, Mr. MOOREof Utah, Ms. VANDUYNE, Mr. FEENSTRA,
21	21	Ms. M
22	22	ALLIOTAKIS, Mr. CAREY, Mr. YAKYM, Mr. MILLERof Ohio, Mr.
23	23	B
24	24	EANof Florida, and Mr. MORAN) introduced the following bill; which
25	25	was referred to the Committee on Ways and Means
26	26	A BILL
27	27	To amend the Internal Revenue Code of 1986 to modify
28	28	the application of the base erosion and anti-abuse tax
29	29	with respect to certain entities connected to jurisdictions
30	30	which have implemented an extraterritorial tax.
31	31	Be it enacted by the Senate and House of Representa-1
32	32	tives of the United States of America in Congress assembled, 2
33	33	SECTION 1. SHORT TITLE. 3
34	34	This Act may be cited as the ‘‘Unfair Tax Prevention 4
35	35	Act’’. 5
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38	38	•HR 2423 IH
39	39	SEC. 2. APPLICATION OF THE BASE EROSION AND ANTI- 1
40	40	ABUSE TAX WITH RESPECT TO CERTAIN EN-2
41	41	TITIES CONNECTED TO EXTRATERRITORIAL 3
42	42	TAX JURISDICTIONS. 4
43	43	(a) I
44	44	NGENERAL.—Section 59A of the Internal Rev-5
45	45	enue Code of 1986 is amended by redesignating subsection 6
46	46	(i) as subsection (j) and inserting after subsection (h) the 7
47	47	following new subsection: 8
48	48	‘‘(i) S
49	49	PECIALRULES FOR FOREIGN-OWNED 9
50	50	E
51	51	XTRATERRITORIALTAXREGIMEENTITIES.— 10
52	52	‘‘(1) I
53	53	N GENERAL.—In the case of any foreign- 11
54	54	owned extraterritorial tax regime entity— 12
55	55	‘‘(A) such entity shall be treated as de-13
56	56	scribed in subparagraphs (B) and (C) of sub-14
57	57	section (e)(1) for purposes of determining 15
58	58	whether such entity is an applicable taxpayer, 16
59	59	‘‘(B) subsection (b)(2) shall be applied by 17
60	60	substituting ‘the date of the enactment of sub-18
61	61	section (i)’ for ‘December 31, 2025’, 19
62	62	‘‘(C) subsections (c)(2)(B), (c)(4)(B)(ii), 20
63	63	and (d)(5) shall not apply, and 21
64	64	‘‘(D) 50 percent of such entity’s cost of 22
65	65	goods sold shall be treated as a base erosion tax 23
66	66	benefit with respect to a base erosion payment. 24
67	67	‘‘(2) F
68	68	OREIGN-OWNED EXTRATERRITORIAL TAX 25
69	69	REGIME ENTITY.—For purposes of this subsection— 26
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72	72	•HR 2423 IH
73	73	‘‘(A) IN GENERAL.—The term ‘foreign- 1
74	74	owned extraterritorial tax regime entity’ means 2
75	75	any taxpayer which is controlled by a foreign 3
76	76	entity (other than a foreign entity controlled by 4
77	77	any domestic corporation) if an extraterritorial 5
78	78	tax is imposed on any of the following entities: 6
79	79	‘‘(i) Any foreign entity which controls 7
80	80	the taxpayer. 8
81	81	‘‘(ii) Any foreign entity which is con-9
82	82	trolled by— 10
83	83	‘‘(I) the taxpayer, or 11
84	84	‘‘(II) any foreign entity described 12
85	85	in clause (i). 13
86	86	‘‘(iii) Any trade or business of any 14
87	87	foreign entity described in clause (i) or (ii). 15
88	88	‘‘(B) E
89	89	XTRATERRITORIAL TAX .— 16
90	90	‘‘(i) I
91	91	N GENERAL .—The term 17
92	92	‘extraterritorial tax’ means any tax im-18
93	93	posed by a foreign country on a corpora-19
94	94	tion (including any trade or business of 20
95	95	such corporation) which is determined by 21
96	96	reference to any income or profits received 22
97	97	by any person (including any trade or busi-23
98	98	ness of any person) by reason of such per-24
99	99	son being connected to such corporation 25
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102	102	•HR 2423 IH
103	103	through any chain of ownership, deter-1
104	104	mined without regard to the ownership in-2
105	105	terests of any individual, and other than by 3
106	106	reason of such corporation having a direct 4
107	107	or indirect ownership interest in such per-5
108	108	son. 6
109	109	‘‘(ii) T
110	110	AX.—The term ‘tax’ includes 7
111	111	any increase in tax whether effectuated by 8
112	112	an increase in the rate or base of a tax, by 9
113	113	a denial of deductions or credits, or other-10
114	114	wise. 11
115	115	‘‘(C) F
116	116	OREIGN ENTITY.—The term ‘foreign 12
117	117	entity’ means any foreign person other than an 13
118	118	individual. 14
119	119	‘‘(D) C
120	120	ONTROL.—Control has the same 15
121	121	meaning given such term under section 16
122	122	954(d)(3).’’. 17
123	123	(b) E
124	124	FFECTIVEDATE.—The amendment made by 18
125	125	this section shall apply to taxable years beginning after 19
126	126	the date of the enactment of this Act. 20
127	127	Æ
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