International Tax Simplification and Reform Act of 1995

Summary

International Tax Simplification and Reform Act of 1995 - Amends the Internal Revenue Code to redefine the degree and nature of the direct and indirect investment (share holding) of a domestic corporation in one or more foreign corporations that is required for both the domestic and the foreign corporations to receive a foreign tax credit for indirectly paying another corporation's foreign income taxes. (Sec. 3) Requires that, with specified exceptions, accrued translated foreign taxes are to be adjusted according to an average exchange rate for the period during which foreign taxes were paid. Makes a special rule for taxes not paid within two years. (Sec. 5) Defines "foreign personal holding company income" as excluding any income when: (1) it derives from sources within the country where the controlled corporation was formed; and (2) the corporation's predominate activity is banking, financing, or similar business, or the income was made on the sale or exchange of specified stock or securities derived from investments by a qualifying insurance company. Declares that the investment income of a person related to a corporation shall be subject to the "look-thru" treatment. Limits "foreign based company services income" by excluding income from services directly related to the conduct of a banking, financing, or similar business if: (1) that business is the corporation's predominate activity; and (2) the corporation's income is derived from sources within the country where the corporation was formed. (Sec. 6) Extends the number of periods to which excess foreign taxes for a given year may be carried. (Sec. 7) Declares that under certain specified circumstances: (1) a portion of dividends earned by a taxpaying corporation on investments in noncontrolled foreign 902 corporations shall be treated as income in a separate category; and (2) generally such dividends shall not be treated as are other dividends. (Sec. 8) Declares that, for the taxation of foreign based company income, the countries in the European Union are treated as one. (Sec. 9) Declares that certain specified statutes do not apply to a taxpayer who is a United States shareholder with respect to a foreign controlled corporation. (Sec. 10) Permits a taxpayer calculating a deductible expense on the basis of assets to use the adjusted bases of assets. (Sec. 11) Permits a taxpayer who sustains an overall domestic loss to recharacterize a specified portion of taxable income in succeeding taxable years as income from outside the United States. Defines (1) "domestic loss" as the amount deductions exceed gross income from in the United States, and (2) "overall domestic loss" as any domestic loss that offsets taxable income from outside the United States not including any loss for a year in which the taxpayer does not choose to recharacterize his income. (Sec. 12) Raises the sum of foreign base company income plus gross insurance income required (de minimis rule) for a taxpayer to treat any portion of gross income as foreign base income or gross insurance income. (Sec. 13) Increases the deduction allowed for specified research and experimental expenditures. (Sec. 14) Requires the filing of a tax return by a U.S. person who: (1) owns ten percent of a foreign corporation's stock (up from five percent); or (2) is an officer or director of a foreign corporation the stock of which is at least ten percent owned by a U.S. person (up from five percent). (Sec. 15) Requires that earnings and profits of any foreign corporation be determined according to the United States' generally accepted accounting principles.

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Timeline

1. 24 May 1995

   Introduced

   Referred to the House Committee on Ways and Means.

   Source: IntroReferral

2. 24 May 1995

   Introduced

   Introduced in House

   Source: IntroReferral

3. 24 May 1995

   Introduced

   Introduced in House

   Source: IntroReferral

4. 11 July 1995

   Committee

   Committee Hearings Held.

   Source: Committee

5. 12 July 1995

   Committee

   Committee Hearings Held.

   Source: Committee

Votes

No vote records are attached yet.

Versions

• Introduced in House · 24 May 1995 · Official file

Documents

3 official files

• Introduced in House (text)

  Introduced in House · EN · 24 May 1995

  ViewDownloadOpen at official source

• Introduced in House (PDF)

  Introduced in House · EN · 24 May 1995

  ViewDownloadOpen at official source

• Introduced in House

  summary · EN · 24 May 1995

  Open at official source

Sponsors

• SANDER LEVIN · D · Sponsor
• Rep. Houghton, Amo [R-NY-34] · R · Sponsor
• Rep. Matsui, Robert T. [D-CA-3] · D · Cosponsor
• Rep. English, Phil [R-PA-3] · R · Cosponsor
• SAM JOHNSON · R · Cosponsor
• Rep. Zimmer, Dick [R-NJ-12] · R · Cosponsor
• Rep. Stupak, Bart [D-MI-1] · D · Cosponsor
• ELIOT ENGEL · D · Cosponsor
• · hswm00 · Standing

Related records

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