This bill changes how the “global intangible low-taxed income” rule is calculated. For certain U.S. owners, it would ignore income from services actually done in the U.S. Virgin Islands by a Virgin Islands corporation, if that income meets specific tests .

Key points

• Which income is ignored: Pay for labor or personal services performed in the Virgin Islands, earned by a corporation formed there; the work must be done from within the Virgin Islands by individuals for that corporation, and be tied to a real business in the Virgin Islands.
• Who qualifies: “Specified U.S. shareholders,” meaning individuals, trusts, estates, and closely held C corporations that owned their stake in the relevant foreign company before December 31, 2023.
• When it starts: Applies to tax years of foreign corporations that begin after the bill becomes law, and to the matching tax years of the U.S. owners.
• Oversight: The Treasury Department must issue rules to carry this out and prevent abuse.