Changes tax rules for companies with foreign income

Raises a deduction for certain foreign income earned by U.S. companies and rewrites several international tax rules, starting with tax years after 2026.

• Increases the deduction for foreign-derived intangible income from 33.34 percent to 40 percent
• Repeals the 90 percent limit on credits for certain foreign taxes paid
• Ends the counting of foreign sales and services income of overseas subsidiaries
• Most changes apply to tax years beginning after December 31, 2026

In committee

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