Senate Finance Committee Chairman Max Baucus (D-MT) on November 19, 2013 released an international tax reform discussion draft prepared by his committee staff. Chairman Baucus stated that the discussion draft reflects Democratic and Republican proposals and concepts put forth in the past three years to “fix a broken system” and “motivate businesses to bring jobs and money back to the US.”
The Finance staff international reform discussion draft (“discussion draft”) proposes to repeal or modify the current deferral system. In its place, the discussion draft provides statutory language for two differing regimes that would generally impose current taxation on all controlled foreign corporations (CFCs) income at a minimum rate.
The discussion draft also proposes a one-time tax on pre-effective date deferred earnings of foreign subsidiaries that have not been subject to US tax.