Senate bill would end key offshore tax breaks for US multinationals

What does this do?

S 409 would require US companies to pay taxes on foreign subsidiary profits annually on a country-by-country basis rather than using a blended global rate. It removes a reduced tax rate on certain foreign earnings and eliminates a deduction that lets companies load US operations with debt to shift profits abroad. It also tightens rules on corporate inversions and would treat foreign companies managed from within the US as American companies for tax purposes.

Who does it affect?

The bill primarily affects large multinational corporations with significant overseas operations or foreign subsidiaries. Foreign companies that do substantial business in the US but are managed from American soil would also be affected.

Why does it matter?

Applying taxes country by country would prevent companies from using blended global rates to obscure low-tax arrangements. Tightening inversion rules and the management-location test would limit companies from reducing their US tax bill through corporate structure changes.

Where does it stand?