S. 357

No Tax Breaks for Outsourcing Act

This bill modifies the tax treatment of the foreign source income of domestic corporations. The bill includes provisions that

• modify calculations of the gross income of U.S. shareholders to include net controlled foreign corporation (CFC) tested income in the current taxable year;
• apply limitations on the foreign tax credit on a country-by-country basis;
• limit the tax deduction for the interest expense of a U.S. corporation that is a member of an international financial reporting group (i.e., a group that prepares consolidated financial statements according to generally accepted accounting principles or international financial reporting standards);
• modify the rules for the taxation of inverted corporations (i.e., U.S. corporations that acquire foreign companies to reincorporate in a foreign jurisdiction with income tax rates lower than the United States); and
• treat certain foreign corporations managed and controlled primarily in the United States as domestic corporations for tax purposes.