Summary

Creates a new Treasury monitoring-and-response system for foreign "extraterritorial" or otherwise "discriminatory" taxes. Treasury must report repeatedly on foreign laws that impose such taxes, engage bilaterally with listed countries, and — if a country stays on the list after a 180-day grace period — may trigger automatic, phased increases to certain U.S. withholding and income tax rates on affected U.S. payers and recipients and impose procurement restrictions and other trade- or treaty-related responses. Requires an initial Treasury report within 90 days of enactment and then at least every 180 days; gives Treasury authority to define terms, issue rules, and notify Congress about actions. The bill focuses on identifying foreign tax practices deemed harmful to U.S. interests and creating automatic and discretionary retaliatory tax and procurement tools to pressure change.

• Establishes mandatory Treasury reporting on foreign extraterritorial or discriminatory taxes within 90 days and every 180 days thereafter.
• Requires enhanced bilateral engagement with countries that impose such taxes after they are identified.
• If a country stays listed past a 180-day grace period, the law enables automatic, phased increases to certain U.S. withholding and income tax rates (by +5, +10, +15, then +20 percentage points annually).
• Authorizes discretionary federal procurement prohibitions and other treaty-, trade-, and procurement-related actions against listed countries.
• Grants Treasury definitions and rulemaking authority to implement listing, delisting, and remedial measures.
• Imposes new compliance responsibilities on U.S. payers, financial institutions, and applicable taxpayers involved in cross-border payments.
• Seeks to pressure foreign governments to repeal or amend taxes deemed extraterritorial or discriminatory through graduated economic measures.
• Could prompt trade or diplomatic disputes and possible legal challenges under treaties or international trade rules.
• Does not itself appropriate funds; it creates an administrative compliance and enforcement regime within existing Treasury authority.
• Reporting and escalation follow a predictable timeline: report (90 days), recurring reports (every 180 days), engagement, then a 180-day grace period before remedies can begin.