119-s2021

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 2021 Introduced in Senate

    (IS) ]

<DOC>

119th CONGRESS
 1st Session
 S. 2021

 To amend the Internal Revenue Code of 1986 to exclude round-tripped 
income for purposes of calculating global intangible low-taxed income, 
 and for other purposes.

_______________________________________________________________________

 IN THE SENATE OF THE UNITED STATES

 June 11, 2025

 Mr. Wyden (for himself, Mr. Warner, Mr. Warnock, and Mr. Welch) 
introduced the following bill; which was read twice and referred to the 
 Committee on Finance

_______________________________________________________________________

 A BILL

 To amend the Internal Revenue Code of 1986 to exclude round-tripped 
income for purposes of calculating global intangible low-taxed income, 
 and for other purposes.

 Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

 This Act may be cited as the ``Close the Round-Tripping Loophole 
Act''.

SEC. 2. MODIFICATION TO DETERMINATION OF NET DEEMED INTANGIBLE INCOME 
 RETURN.

    (a) In General.--

Section 951A

    (b)

    (2)
        (A) of the Internal Revenue Code 
of 1986 is amended--

    (1) by striking ``10 percent of the aggregate of'' and 
 inserting ``10 percent of the excess (if any) of--
 ``
            (i) the aggregate of'', and

    (2) by adding at the end the following new clause:
 ``
            (ii) an amount equal to the product of 
 the amount determined under clause
            (i) and the 
 round-tripping ratio, over''.

    (b) Round-Tripping Ratio.--

Section 951A

    (b) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
paragraph:
 ``

    (3) Round-tripping ratio.--For purposes of this 
 subsection--
 ``
        (A) In general.--The round-tripping ratio means, 
 with respect to any United States shareholder for any 
 taxable year, the percentage (not greater than 100 
 percent) which is equal to the ratio which--
 ``
            (i) the shareholder's round-tripped net 
 CFC tested income for such taxable year 
 determined under subparagraph
        (B) , bears to
 ``
            (ii) the shareholder's net CFC tested 
 income for such taxable year, determined 
 without regard to this paragraph.
 ``
        (B) Shareholder's round-tripped net cfc tested 
 income.--For purposes of subparagraph
        (A)
            (i) , a United 
 States shareholder's round-tripped net CFC tested 
 income for any taxable year is the net CFC tested 
 income of such shareholder which would be determined 
 under subsection
            (c) for such taxable year if--
 ``
            (i) the only income taken into account 
 under clause
            (i) of subsection
            (c) (2)
        (A) in 
 determining the tested income or tested loss of 
 each controlled foreign corporation taken into 
 account by such shareholder under subsection
            (c) (1) for such taxable year were income 
 described in such clause which is derived in 
 connection with--
 ``
            (I) property--
 ``

    (aa) which is sold by the 
 taxpayer to any person who is a 
 United States person, or
 ``

    (bb) which the taxpayer 
 cannot establish to the 
 satisfaction of the Secretary 
 is for foreign use, or
 ``
            (II) services provided by the 
 taxpayer which the taxpayer cannot 
 establish to the satisfaction of the 
 Secretary are provided to any person, 
 or with respect to property, not 
 located within the United States, and
 ``
            (ii) the only deductions taken into 
 account under clause
            (ii) of subsection
            (c) (2)
        (A) in determining such tested income or 
 tested loss were deductions properly allocable 
 to income described in clause
            (i) .
 ``
            (C) Foreign use.--For purposes of this 
 subsection, the determination of whether property is 
 for a foreign use shall be made in the same manner as 
 under 

section 250

    (b) .
 ``
            (D) Exception for certain small taxpayers.--
 ``
            (i) In general.--In the case of any 
 United States shareholder described in clause
            (ii) , the round-tripping ratio shall be 0 
 percent.
 ``
            (ii) Taxpayer described.--
 ``
            (I) In general.--A United States 
 shareholder is described in this clause 
 if the average annual gross receipts of 
 such United States shareholder for the 
 3-taxable year period ending with the 
 taxable year which precedes such 
 taxable year does not exceed 
 $100,000,000.
 ``
            (II) Application of certain 
 rules.--Rules similar to the rules of 
 paragraphs

    (2)
        (B) and

    (3) of 

section 59A

    (e) shall apply for purposes of this 
 clause.''.
            (c) Effective Date.--The amendments made by this section shall 
apply 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.

SEC. 3. LIMITATION ON DEDUCTION FOR GLOBAL INTANGIBLE LOW-TAXED INCOME.

    (a) In General.--

Section 250

    (a)

    (1)
        (B) of the Internal Revenue Code 
of 1986 is amended to read as follows:
 ``
        (B) 50 percent of the excess (if any) of--
 ``
            (i) the sum of--
 ``
            (I) the global intangible low-
 taxed income amount (if any) which is 
 included in the gross income of such 
 domestic corporation under 

section 951A 
 for such taxable year, and
 ``
            (II) the amount treated as a 
 dividend received by such corporation 
 under 

section 78 which is attributable 
 to the amount described in subclause
            (I) , over
 ``
            (ii) an amount equal to the product of 
 the amount determined under clause
            (i) and the 
 round-tripping ratio (as determined under 
 

section 951A

    (b)

    (3) ) of such domestic 
 corporation for such taxable year.''.

    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.
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