No Tax Breaks for Outsourcing Act

This bill changes U.S. business tax rules to reduce tax breaks for shifting profits overseas. It makes U.S. companies count the profits of their foreign subsidiaries each year and ends the special lower tax rate on that income and on some export-related income. It also makes companies figure foreign taxes country by country, instead of mixing high‑tax and low‑tax countries together. The bill caps how much interest big multinational groups can deduct. And it treats some foreign corporations as U.S. corporations for tax purposes when they are run from the United States or when they moved their legal address offshore.

• Who is affected

  • Large companies with international operations, including those with foreign subsidiaries or branches; and U.S. shareholders who own them.
  • Companies that inverted (moved their legal address overseas) or that are managed and controlled from the U.S.
  • Oil and gas companies with certain foreign oil‑related income.

• What changes

  • Companies must include foreign profits each year; the special deduction that lowered tax on those profits and on some export income is repealed.
  • Foreign taxes are calculated and limited country by country; carryback of foreign tax credits is eliminated.
  • The “high‑tax” exception for some foreign income is repealed, and certain oil‑related profits are taxed right away.
  • Interest deductions for members of large international groups are capped; any disallowed interest can be carried forward for up to five years.
  • More “foreign” corporations will be treated as U.S. for tax if they inverted or are managed and controlled here.

• When

  • Most changes apply to tax years starting after December 31, 2024.
  • The managed‑and‑controlled rule starts two years after enactment.
  • The anti‑inversion updates apply to tax years ending after December 22, 2017.