Bill · H.R. 1911· House(119-HR-1911)
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.
- Introduced
- 3/6/2025
- Last activity
- 3/6/2025 — Referred to the House Committee on Ways and Means.
- Sponsored by
- Herbert Conaway
- Cosponsors
- - 1 - 1
- Introduced
- In Committee
What this bill would do
This bill proposes an amendment to the Internal Revenue Code of 1986 regarding base erosion payments. It aims to ensure that certain payments made to foreign related parties are not treated as base erosion payments if specific tax conditions are met. To qualify, the taxpayer must show that both the foreign person receiving the payment and the payment itself are subject to an effective foreign income tax rate of at least 15 percent. The bill also outlines how these effective rates can be determined using financial statements with specific adjustments. Additionally, it directs the creation of rules to prevent tax avoidance or abuse.
Yes
Would business owners be better off under this?+3
The bill provides more certainty and potential tax relief for businesses with foreign related parties subject to a 15 percent tax rate.
Would high-income households be better off under this?+2
The bill's provisions primarily benefit large corporations and high-income entities involved in international tax planning.
Does this make trade with other countries easier?+2
The bill facilitates more efficient cross-border transactions for multinational corporations by clarifying the treatment of certain payments.
The opposite
Does this raise the taxes companies pay?-3
The bill provides a carve-out from base erosion rules for companies paying at least a 15 percent foreign tax rate, which may reduce their overall federal tax liability.
Does this make the government pay for what it commits to?-2
By exempting certain payments from base erosion rules, the bill may reduce federal tax revenue compared to the existing code.
Does this make what the government does easier for the public to see?-1
The bill grants the Secretary broad authority to create rules and recharacterize transactions, which may decrease clarity in tax administration.
Who it would affect, and how
Potential Positive Impacts for People
- Treatment of payments not as base erosion payments: Under Section 1(a)(1), an amount will not be treated as a base erosion payment if the taxpayer proves the foreign person and the amount are both subject to an effective foreign income tax rate of at least 15 percent.
Potential Negative Impacts for People
- Rules to prevent tax avoidance or abuse: Under Section 1(b)(3), the Secretary will have the authority to implement rules to prevent tax avoidance or abuse, which includes rules for recharacterizing a transaction or series of transactions among related parties.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Business Owners+3Good For High Income Households+2
- Economy And Finance
- Increases Corporate Taxes-3Improves Fiscal Responsibility-2
- National Security And Foreign Policy
- Improves International Trade+2
- Governance And Ideology
- Improves Government Transparency-1
- 3/6/2025
- Referred to the House Committee on Ways and Means.
- 2 Cosponsors added.
- Introduced in House
Thomas SuozziDemocrat · New York
Jefferson Van DrewRepublican · New Jersey