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To amend the Internal Revenue Code of 1986 to provide that certain payments to foreign related parties subject to sufficient foreign tax are not treated as base erosion payments.
To amend the Internal Revenue Code of 1986 to provide that certain payments to foreign related parties subject to sufficient foreign tax are not treated as base erosion payments.
Summary
The bill amends the Internal Revenue Code to provide an exemption to the base erosion and anti-abuse tax (BEAT) for certain payments made to foreign related parties. Payments will not be treated as base erosion payments if the foreign recipient is subject to a foreign effective income tax rate of at least 15 percent and the payment itself is subject to an effective foreign income tax rate of at least 15 percent. The bill allows taxpayers to establish the effective foreign tax rate using applicable financial statements with specified adjustments, as determined by the Treasury Secretary. The Treasury Secretary is authorized to issue regulations regarding procedures for determining effective foreign tax rates and rules to prevent tax avoidance or abuse. The amendments apply to taxable years beginning after the bill's enactment.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
2 cosponsors
Money behind the sponsor
Top reported contributors to Herbert C. Conaway’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- RAMAS CONTRACTORS, LLC $13,200
- NEUROSURGEONS OF NEW JERSEY $13,200
- ASTERA $12,450
- ALLIED DIGESTIVE HEALTH $10,900
- STATE OF NEW JERSEY $10,450
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for Herbert C. Conaway → · Outside spending →
Actions (2)
- Mar 6, 2025 Referred to the House Committee on Ways and Means. · house
- Mar 6, 2025 Introduced in House
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Text versions (1)
Bills are re-published as they move (Introduced → Reported → Engrossed → Enrolled …). Each stage below is a separate text; pick two to see what changed. Data from Congress.gov.
Full text
IN THE HOUSE OF REPRESENTATIVES
March 6, 2025
Mr. Conaway (for himself, Mr. Suozzi, and Mr. Van Drew) introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide that certain payments to foreign related parties subject to sufficient foreign tax are not treated as base erosion payments.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. CERTAIN PAYMENTS TO FOREIGN RELATED PARTIES SUBJECT TO SUFFICIENT FOREIGN TAX NOT TREATED AS BASE EROSION PAYMENTS.
(a) In General.—Section 59A of the Internal Revenue Code of 1986 is amended by redesignating subsection (i) as subsection (j) and by inserting after subsection (h) the following new subsection:
“(i) Certain Payments to Foreign Related Parties Subject to Sufficient Foreign Tax Not Treated as Base Erosion Payments.—
“(1) In general.—An amount shall not be treated as a base erosion payment if the taxpayer establishes to the satisfaction of the Secretary that—
“(A) the foreign person to whom such amount is paid or incurred is subject to an effective rate of foreign income tax of at least 15 percent, and
“(B) such amount is subject to an effective rate of foreign income tax of at least 15 percent.
“(2) Determination of effective rate on basis of applicable financial statements.—Except as otherwise provided by the Secretary, the effective rate of foreign income tax may be established on the basis of applicable financial statements (as defined in section 451(b)(3)) with appropriate adjustments (as determined by the Secretary) for excluded dividends, net tax expense, excluded equity gain or loss, included revaluation method gain or loss, gain or loss from intragroup transfers of assets and liabilities, asymmetric foreign currency gains or losses, bribes, illegal payments, large penalties, prior period errors and changes in accounting methods, accrued pension expenses, and such other items as the Secretary may provide.
“(3) Foreign income tax.—For purposes of this subsection, the term “foreign income taxes” means any income, war profits, or excess profits taxes paid or accrued to any foreign country or to any possession of the United States.”.
(b) Regulations.—Section 59A(j) of such Code, as redesignated by subsection (a), is amended by striking “and” at the end of paragraph
(1), by striking the period at the end of paragraph (2) and inserting “, and”, and by adding at the end the following new paragraph:
“(3) for the application of subsection (i), including—
“(A) procedures for determining the effective rate of foreign income tax, and
“(B) rules to the prevent tax avoidance or abuse, including rules for recharacterizing a transaction or series of transactions among related parties.”.
(c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. <all>
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