Bill
HR 995
The No Tax Breaks for Outsourcing Act ends tax incentives for U.S. companies outsourcing jobs, aiming to boost domestic employment and protect American workers.
The No Tax Breaks for Outsourcing Act (HR 995) was introduced in the House of Representatives on February 5, 2025. The primary intent of this legislation is to eliminate tax incentives that encourage U.S. corporations to outsource jobs and operations to foreign countries, thereby promoting domestic employment and economic growth.
The bill includes several significant provisions aimed at reforming the tax code as it relates to international business operations:
Current Year Inclusion of Net CFC Tested Income: This provision mandates that U.S. corporations must include their net income from controlled foreign corporations (CFCs) in their taxable income for the current year, thereby reducing the tax benefits associated with deferring income from foreign operations.
Country-by-Country Application of Foreign Tax Credit Limitations: The bill proposes a country-specific approach to limit the foreign tax credit based on taxable units, which aims to prevent corporations from claiming excessive credits for taxes paid to foreign governments.
Limitation on Interest Deductions: Domestic corporations that are part of an international financial reporting group will face restrictions on the deduction of interest expenses, which is intended to curb profit shifting to lower-tax jurisdictions.
Modifications to Inverted Corporations Rules: The legislation seeks to tighten the rules surrounding inverted corporations—companies that relocate their headquarters abroad to benefit from lower taxes—making it more difficult for them to qualify for tax benefits.
Treatment of Foreign Corporations Managed in the U.S.: Foreign corporations that are managed and controlled within the United States will be treated as domestic corporations for tax purposes, ensuring they are subject to U.S. tax laws.
The No Tax Breaks for Outsourcing Act is expected to have a broad impact on:
The bill has garnered support from a wide range of cosponsors, indicating a significant interest in reforming tax policies related to outsourcing. Notable cosponsors include:
HR 995 has a companion bill in the Senate, S 409, which addresses similar issues regarding tax breaks for outsourcing.
This summary provides a comprehensive overview of HR 995, highlighting its purpose, key provisions, potential impacts, and legislative status. The bill represents a significant step towards reforming tax incentives that promote outsourcing, with the goal of strengthening the U.S. economy and workforce.
Compiled from official sources — confirm details with the bill’s official record.
Sign in to ask a question.
