Current year inclusion of net CFC tested income

(a) Repeal of tax-Free deemed return on investments (1) In general Section 951A(a) is amended by striking global intangible low-taxed income and inserting net CFC tested income. (2) Conforming amendments (A) Section 951A is amended by striking subsections (b) and (d). (B) Section 951A(e)(1) is amended by striking subsections (b), (c)(1)(A), and and inserting subsections (c)(1)(A) and. (C) Section 951A(f) is amended by striking global intangible low-taxed income each place it appears and inserting net CFC tested income. (D) Section 960(d)(2)(A) is amended by striking global intangible low-taxed income (as defined in section 951A(b)) and inserting net CFC tested income (as defined in section 951A(c)). (b) Country-by-Country application of section based on CFC taxable units Section 951A is amended by adding at the end the following new subsection: (g) Country-by-Country application of section based on CFC taxable units (1) In general If any CFC taxable unit of a United States shareholder is a tax resident of (or, in the case of a branch, is located in) a country which is different from the country with respect to which any other CFC taxable unit of such United States shareholder is a tax resident (or, in the case of a branch, is located in)— (A) such shareholder’s net CFC tested income for purposes of subsection (a) shall be the sum of the amounts of net CFC tested income determined separately with respect to each such country, and (B) for purposes of determining such separate amounts of net CFC tested income— (i) except as otherwise provided by the Secretary, any reference in subsection (c) to a controlled foreign corporation of such shareholder shall be treated as reference to a CFC taxable unit of such shareholder, and (ii) net CFC tested income and such other items and amounts as the Secretary may provide, shall be determined separately with respect to each such country by determining such amounts with respect to the CFC taxable units of such shareholder which are a tax resident of such country. (2) Definitions For purposes of this subsection— (A) CFC taxable unit The term CFC taxable unit means any taxable unit described in clause (ii), (iii), or (iv) of section 904(e)(2)(B), determined— (i) by substituting controlled foreign corporation for foreign corporation each place it appears in such clauses, and (ii) without regard to the references to the taxpayer in clauses (iii) and (iv) of such section. (B) Application of other definitions Terms used in this subsection which are also used in section 904(e) shall have the same meaning as when used in section 904(e). (3) Special rules For purposes of this subsection— (A) Application of certain rules Except as otherwise provided by the Secretary, rules similar to the rules of section 904(e) shall apply. (B) Allocation of net CFC tested income to controlled foreign corporations Except as otherwise provided by the Secretary, subsection (f)(2) shall be applied separately with respect to each CFC taxable unit.. (c) Regulatory authority Section 951A, as amended by subsection (b), is amended by adding at the end the following new subsection: (h) Regulations The Secretary shall issue such regulations or other guidance as may be necessary or appropriate to carry out, or prevent the avoidance of, the purposes of this section, including regulations or guidance which provide for— (1) the treatment of property if such property is transferred, or held, temporarily, (2) the treatment of property if the avoidance of the purposes of this section is a factor in the transfer or holding of such property, (3) appropriate adjustments to the basis of stock and other ownership interests, and to earnings and profits, to reflect tested losses (whether or not taken into account in determining net CFC tested income), (4) rules similar to the rules provided under the regulations or guidance issued under section 904(e)(4), (5) other appropriate basis adjustments, (6) appropriate adjustments to be made, and appropriate tax attributes and records to be maintained, separately with respect to CFC taxable units, and (7) appropriate adjustments in determining tested income or tested loss if property is transferred between related parties or amounts are paid or accrued between related parties.. (d) Coordination with other provisions Section 951A(f)(1) is amended by adding at the end the following new subparagraph: (C) Treatment of certain references Except as otherwise provided by the Secretary, references to section 951 or section 951(a) in sections 959, 961, 962, and such other provisions as the Secretary may identify shall include references to section 951A or section 951A(a), respectively.. (e) Repeal of reduced rate of tax on net CFC tested income and foreign-Derived intangible income (1) In general Part VIII of subchapter B of chapter 1 is amended by striking section 250 (and by striking the item relating to such section in the table of sections of such part). (2) Conforming amendments (A) Section 59A(c)(4)(B)(i) is amended by striking section 172, 245A, or 250 and inserting section 172 or 245A. (B) Section 172(d) is amended by striking paragraph (9). (C) Section 246(b)(1) is amended— (i) by striking subsection (a) and (b) of section 245, and section 250 and inserting and subsection (a) and (b) of section 245; and (ii) by striking subsection (a) and (b) of section 245, and 250 and inserting and subsection (a) and (b) of section 245. (D) Section 469(i)(3)(E)(iii) is amended by striking, 221, and 250 and inserting and 221. (f) Repeal of certain exclusions from the determination of tested income Section 951A(c)(2)(A)(i) is amended— (1) by striking subclauses (III) and (V), (2) by redesignating subclause (IV) as subclause (III), (3) by adding and at the end of subclause (II), and (4) by striking and at the end of subclause (III) (as so redesignated) and inserting over. (g) Increase in deemed paid credit for taxes properly attributable to tested income (1) In general Section 960(d) is amended by striking 80 percent of. (2) Conforming amendment Section 78 is amended by striking (determined without regard to the phrase “80 percent of” in subsection (d)(1) thereof). (h) Repeal of high tax exclusion for foreign base company income and insurance income (1) In general Section 954(b) is amended by striking paragraph (4). (2) Conforming amendment Section 904(d)(3)(E) is amended by striking the last sentence. (i) Elimination of carryback of foreign tax credit (1) In general Section 904(c) is amended— (A) by striking in the first preceding taxable year, and in any of the first 10 succeeding taxable years, in that order and inserting in any of the first 10 succeeding taxable years, in order, (B) by striking preceding or each place it appears, and (C) by striking Carryback and in the heading thereof. (2) Application to limitation on foreign oil and gas taxes Section 907(f) is amended— (A) in paragraph (1), by striking in the first preceding taxable year and, (B) in paragraph (2), by striking preceding or in the matter preceding subparagraph (A), (C) in paragraph (3)(B)— (i) by striking in a preceding or succeeding and inserting in a succeeding, and (ii) by striking in such preceding or succeeding both places it appears and inserting in such succeeding, and (D) in the heading, by striking Carryback and. (j) Treatment of foreign base company oil related income as subpart F income (1) In general Section 954(a) is amended by striking and at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting, and, and by adding at the end the following new paragraph: (4) the foreign base company oil related income for the taxable year (determined under subsection (f) and reduced as provided in subsection (b)(5)).. (2) Foreign base company oil related income Section 954 is amended by inserting after subsection (e) the following new subsection: (f) Foreign base company oil related income For purposes of this section, the term foreign base company oil related income means foreign oil related income (within the meaning of paragraphs (2) and (3) of section 907(c)) other than income derived from a source within a foreign country in connection with— (1) oil or gas which was extracted from an oil or gas well located in such foreign country, or (2) oil, gas, or a primary product of oil or gas which is sold by the foreign corporation or a related person for use or consumption within such country or is loaded in such country on a vessel or aircraft as fuel for such vessel or aircraft. Such term shall not include any foreign personal holding company income (as defined in subsection (c)).. (3) Conforming amendments (A) Section 952(c)(1)(B)(iii) is amended by redesignating subclauses (III) and (IV) as subclauses (IV) and (V), respectively, and by inserting after subclause (II) the following new subclause: (III) foreign base company oil related income.. (B) Section 954(b) is amended— (i) by striking and the foreign base company services income in paragraph (5) and inserting the foreign base company services income, and the foreign base company oil related income, and (ii) by adding at the end the following new paragraph: (6) Foreign base company oil related income not treated as another kind of foreign base company income Income of a corporation which is foreign base company oil related income shall not be considered foreign base company income of such corporation under paragraph (2) or (3) of subsection (a).. (k) Effective dates (1) In general Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2024, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. (2) Regulatory authority and coordination with other provisions The amendments made by subsections (c) and (d) shall apply to taxable years of foreign corporations beginning after the date of the enactment of this Act, and to taxable years of United States shareholders in which or with which such taxable years of foreign corporations end. (3) Repeal of reduced rate of tax; increase in deemed paid credit The amendments made by subsections (e) and (g) shall apply to taxable years beginning after December 31, 2024. (4) Elimination of carryback of foreign tax credit The amendment made by subsection (i) shall apply to credits arising in taxable years beginning after December 31, 2024. (l) No inference regarding certain modifications The amendments made by subsections (c) and (d) shall not be construed to create any inference with respect to the proper application of any provision of the Internal Revenue Code of 1986 with respect to any taxable year beginning before the taxable years to which such amendments apply.