S 2021
Close the Round-Tripping Loophole Act
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Bill overview
The Close the Round-Tripping Loophole Act aims to reduce tax avoidance by multinational corporations. Specifically, it modifies how the IRS calculates global intangible low-taxed income (GILTI) by introducing a ‘round-tripping ratio.’ This ratio measures the extent to which income is artificially moved through shell companies to reduce GILTI liability. The bill also limits the deduction for GILTI to 50% of the excess of GILTI income over an amount adjusted by the round-tripping ratio. A small taxpayer exception is included, exempting those with average annual gross receipts under $100 million from the round-tripping calculation.
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