Rules related to deemed intangible income

(a) Taxation of net CFC tested income (1) In general Section 951A(a) is amended by striking global intangible low-taxed income and inserting net CFC tested income. (2) Repeal of tax-free deemed return on foreign investments Section 951A, as amended by the preceding provisions of this Act, is amended by striking subsections (b) and (d) and by redesignating subsections (c), (e), and (f) as subsections (b), (c), and (d), respectively. (3) Conforming amendments (A) (i) Section 250 is amended by striking global intangible low-taxed income each place it appears in subsections (a)(1)(B)(i), (a)(2), and (b)(3)(A)(i)(II) and inserting net CFC tested income. (ii) The heading for section 250 of such Code is amended by striking Global Intangible Low-Taxed Income and inserting Net CFC Tested Income. (iii) The item relating to section 250 in the table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking global intangible low-taxed income and inserting net CFC tested income. (B) Section 951A(c)(1), as redesignated by paragraph (2), is amended by striking subsections (b), (c)(1)(A), and (c)(1)(B) and inserting subsections (b)(1)(A) and (b)(1)(B). (C) Section 951A(d), as redesignated by paragraph (2), is amended— (i) by striking global intangible low-taxed income each place it appears and inserting net CFC tested income, and (ii) by striking subsection (c)(1)(A) in paragraph (2)(B)(ii) and inserting subsection (b)(1)(A). (D) Section 960(d)(2) is amended— (i) by striking global intangible low-taxed income in subparagraph (A) and inserting net CFC tested income, and (ii) by striking section 951A(c)(1)(A) in subparagraph (B) and inserting section 951A(b)(1)(A). (E) (i) The heading for section 951A is amended by striking Global Intangible Low-Taxed Income and inserting Net CFC Tested Income. (ii) The item relating to section 951A in the table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking Global intangible low-taxed income and inserting Net CFC tested income. (b) Deduction for foreign-derived deduction eligible income (1) In general Section 250(a)(1)(A) is amended by striking foreign-derived intangible income and inserting foreign-derived deduction eligible income. (2) Conforming amendments (A) Section 250(a)(2) is amended by striking foreign-derived intangible income each place it appears and inserting foreign-derived deduction eligible income. (B) Section 250(b), as amended by subsection (a), is amended— (i) by striking paragraphs (1) and (2), (ii) by redesignating paragraphs (4) and (5) as paragraphs (1) and (2), respectively, and by moving such paragraphs before paragraph (3), (iii) in paragraph (2)(B)(ii), as so redesignated, by striking paragraph (4)(B) and inserting paragraph (1)(B), and (iv) by striking intangible in the heading thereof and inserting deduction eligible. (C) (i) The heading for section 250 is amended by striking intangible in the heading thereof and inserting deduction eligible. (ii) The heading for section 172(d)(9) is amended by striking intangible and inserting deduction eligible. (iii) The item relating to section 250 in the table of sections for part VIII of subchapter B of chapter 1 is amended by striking intangible and inserting deduction eligible. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.

(a) Taxation of net CFC tested income (1) In general Section 951A(a) is amended by striking global intangible low-taxed income and inserting net CFC tested income. (2) Repeal of tax-free deemed return on foreign investments Section 951A, as amended by the preceding provisions of this Act, is amended by striking subsections (b) and (d) and by redesignating subsections (c), (e), and (f) as subsections (b), (c), and (d), respectively. (3) Conforming amendments (A) (i) Section 250 is amended by striking global intangible low-taxed income each place it appears in subsections (a)(1)(B)(i), (a)(2), and (b)(3)(A)(i)(II) and inserting net CFC tested income. (ii) The heading for section 250 of such Code is amended by striking Global Intangible Low-Taxed Income and inserting Net CFC Tested Income. (iii) The item relating to section 250 in the table of sections for part VII of subchapter B of chapter 1 of such Code is amended by striking global intangible low-taxed income and inserting net CFC tested income. (B) Section 951A(c)(1), as redesignated by paragraph (2), is amended by striking subsections (b), (c)(1)(A), and (c)(1)(B) and inserting subsections (b)(1)(A) and (b)(1)(B). (C) Section 951A(d), as redesignated by paragraph (2), is amended— (i) by striking global intangible low-taxed income each place it appears and inserting net CFC tested income, and (ii) by striking subsection (c)(1)(A) in paragraph (2)(B)(ii) and inserting subsection (b)(1)(A). (D) Section 960(d)(2) is amended— (i) by striking global intangible low-taxed income in subparagraph (A) and inserting net CFC tested income, and (ii) by striking section 951A(c)(1)(A) in subparagraph (B) and inserting section 951A(b)(1)(A). (E) (i) The heading for section 951A is amended by striking Global Intangible Low-Taxed Income and inserting Net CFC Tested Income. (ii) The item relating to section 951A in the table of sections for subpart F of part III of subchapter N of chapter 1 is amended by striking Global intangible low-taxed income and inserting Net CFC tested income. (b) Deduction for foreign-derived deduction eligible income (1) In general Section 250(a)(1)(A) is amended by striking foreign-derived intangible income and inserting foreign-derived deduction eligible income. (2) Conforming amendments (A) Section 250(a)(2) is amended by striking foreign-derived intangible income each place it appears and inserting foreign-derived deduction eligible income. (B) Section 250(b), as amended by subsection (a), is amended— (i) by striking paragraphs (1) and (2), (ii) by redesignating paragraphs (4) and (5) as paragraphs (1) and (2), respectively, and by moving such paragraphs before paragraph (3), (iii) in paragraph (2)(B)(ii), as so redesignated, by striking paragraph (4)(B) and inserting paragraph (1)(B), and (iv) by striking intangible in the heading thereof and inserting deduction eligible. (C) (i) The heading for section 250 is amended by striking intangible in the heading thereof and inserting deduction eligible. (ii) The heading for section 172(d)(9) is amended by striking intangible and inserting deduction eligible. (iii) The item relating to section 250 in the table of sections for part VIII of subchapter B of chapter 1 is amended by striking intangible and inserting deduction eligible. (c) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2025.