Congress quietly narrows corporate anti-tax-avoidance rule for multinationals

What it does

This bill amends the tax code to exempt certain payments made by U.S. corporations to foreign subsidiaries or related parties from the 'base erosion and anti-abuse tax' (BEAT), provided those payments are subject to at least 15% foreign income tax in the recipient country. The exemption applies only if both the foreign recipient and the payment itself face at least 15% effective foreign tax rates. This allows multinational corporations to deduct more payments to foreign affiliates without triggering the BEAT penalty, reducing their U.S. tax liability.

Why we flagged it

The bill's operative mechanism is a narrow exemption from anti-base-erosion taxation for multinational corporations, reducing their U.S. tax liability on payments to foreign affiliates. This is a targeted tax relief provision benefiting a specific class of taxpayers (multinationals with foreign operations) at the expense of broader revenue.

What the text implies

• The 15% foreign tax threshold aligns with the OECD global minimum tax agreement, but this bill applies it unilaterally to exempt U.S. corporations from BEAT, potentially creating asymmetry if other countries do not reciprocate.
• The exemption is available on a self-certification basis (taxpayer establishes to the Secretary's satisfaction), creating audit and enforcement complexity and potential for aggressive tax planning.
• Payments to foreign subsidiaries in low-tax jurisdictions that have adopted 15% minimum taxes (e.g., through treaty or unilateral adoption) become deductible, potentially enabling profit-shifting to jurisdictions with minimal real economic activity.
• The bill does not require the foreign subsidiary to actually conduct business or generate income in the foreign jurisdiction—only that the payment be subject to 15% tax, creating opportunities for circular payments and tax arbitrage.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill narrows the base erosion tax by exempting certain payments to foreign subsidiaries, reducing federal revenue from multinational corporations and shifting the relative tax burden toward domestic businesses and individual taxpayers. The 15% foreign tax threshold is permissive—many jurisdictions meet or exceed it—and the exemption is available to large corporations with foreign operations, not to ordinary citizens.

Who stands to gain

• multinational corporations with foreign subsidiaries
• large corporations with cross-border payment structures
• pharmaceutical and technology companies with foreign IP holdings

Named in the bill

Internal Revenue Code Section 59A (BEAT), U.S. Treasury Department, Foreign income tax authorities, Multinational corporations

Where it stands

2 cosponsors: 1 Democrats, 1 Republicans.

• Mar 6, 2025 — Introduced · Congress.gov: “Introduced in House”
• Mar 6, 2025 — Referred to House Committee on Ways and Means · Congress.gov: “Referred to the House Committee on Ways and Means”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.

Money around this bill

2 lobbying clients named this bill on 2 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $1,980,000 in lobbying spend. A filing names 10 bills on average, so that figure is what each filing reported, not a share belonging to this bill.

More lobbying clients named this bill than 41% of bills with at least one filing.

Herbert Conaway, the sponsor, reported $527,013 in PAC receipts in the 2026 cycle.

• Astrazeneca Pharmaceuticals Lp — $1,680,000 on 1 filing
• Global Business Alliance — $300,000 on 1 filing

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.