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119-s-2021119th CongressWALLET

Close the Round-Tripping Loophole Act

Sponsored By: Senator Wyden, Ron [D-OR]

Introduced

Summary

This bill would _curb round‑tripping that reduces United States tax on offshore profits_. It adds a new "round‑tripping ratio" to the global intangible low‑taxed income (GILTI) calculation and cuts the Section 250 deduction in proportion to that ratio to shrink the tax advantage of routing earnings through controlled foreign corporations.

Show full summary
  • Large U.S. multinational companies: More foreign‑affiliate profits could be treated as GILTI under the new calculation, and the Section 250 deduction is limited so its benefit falls as the round‑tripping ratio rises. The deduction formula includes a 50 percent baseline that is reduced by the ratio.
  • Small U.S. shareholders and businesses: A 0 percent round‑tripping ratio applies to qualifying U.S. shareholders that meet a 3‑year average gross receipts test of at most $100 million, protecting their deduction from reduction.
  • Timing and scope: The changes apply to foreign corporations' taxable years beginning after enactment and to U.S. shareholder years that end with or include those foreign years. Section 3's deduction limit applies to taxable years beginning after enactment.

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Bill Overview

Analyzed Economic Effects

1 provisions identified: 0 benefits, 1 costs, 0 mixed.

Higher taxes on round-tripped foreign income

If enacted, U.S. shareholders of foreign subsidiaries would get a yearly "round-tripping ratio." The ratio measures how much tested CFC income is treated as round-tripped and is capped at 100%. The bill would set the ratio to 0% for firms with average annual gross receipts of $100,000,000 or less (three-year average). The 10% base used in the GILTI calculation would be reduced by that ratio. The Section 250 deduction for GILTI would also be cut so you could only deduct 50% of the adjusted GILTI amount. These rules would apply to taxable years after enactment for the deduction and to the relevant foreign corporation years for the GILTI math.

Sponsors & CoSponsors

Sponsor

Wyden, Ron [D-OR]

OR • D

Cosponsors

  • Sen. Warner, Mark R. [D-VA]

    VA • D

    Sponsored 6/11/2025

  • Sen. Warnock, Raphael G. [D-GA]

    GA • D

    Sponsored 6/11/2025

  • Sen. Welch, Peter [D-VT]

    VT • D

    Sponsored 6/11/2025

Roll Call Votes

No roll call votes available for this bill.

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