Ending Tax Breaks for Outsourcing: Stricter Rules for Corporate Foreign Income.
This Act aims to eliminate tax incentives for US corporations that shift operations and profits overseas. It introduces stricter rules for taxing foreign income, including repealing the reduced tax rate on certain foreign-derived income and limiting interest deductions for international financial groups. While these changes directly target large corporations, the goal is to encourage companies to maintain jobs and investments within the US, potentially impacting economic stability and the job market for citizens.
Key points
Taxation of Foreign Profits: Repeals tax breaks for Global Intangible Low-Taxed Income (GILTI), meaning foreign subsidiary profits will be taxed in the US in the year they are earned.
Interest Deduction Limits: Imposes limits on interest deductions for domestic corporations that are part of international financial reporting groups to prevent profit shifting through debt manipulation.
Anti-Inversion Measures: Tightens rules regarding corporate inversions (moving headquarters abroad) to make it harder for companies to avoid US taxes.
Foreign Tax Credit Changes: Eliminates the ability to carry back foreign tax credits to previous years, limiting corporate flexibility in managing tax liabilities.
Expired
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