Sen. Levin introduces legislation targeting offshore income

Sen. Levin introduces legislation targeting offshore income

Sen. Carl Levin (D-MI) and Senator Sheldon Whitehouse (D-RI), February 11, introduced a bill with significant implications for U.S. multinationals. Many of the international provisions in the Cut Unjustified Tax Loopholes Act (S. 2075) were lifted from the Administration's FY2013 Green Book.

Key U.S.-international provisions in the legislation include:

... requiring foreign tax credits to be calculated on a pooled basis;

... the deferral of tax deductions for U.S. corporations with offshore income until the profit is repatriated to the U.S.;

... immediately taxing excess income to foreign affiliates receiving U.S. intellectual property, limiting income shifting through U.S. property transfers offshore, and tightening the rules related to the valuation of “goodwill” and other intangible;

... preventing U.S. companies that invert from engaging in “earnings stripping” to avoid U.S. taxes;

... shifting the burden of proof on establishing who controls an offshore entity;

... stop corporations managed and controlled in the U.S. from claiming foreign status;

... treat derivative payments made from the U.S. to offshore recipients as U.S. income;

... penalizing foreign financial institutions and foreign countries that interfere with U.S. tax enforcement; and

... Strengthening the Foreign Account Tax Compliance Act by clarifying when foreign financial institutions and U.S. persons must report foreign financial accounts to the IRS.

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