The changes start with foreign firm tax years after 2025, with a dividend transition
What the document says“The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2025.”
The section applies its amendments to taxable years of foreign corporations beginning after December 31, 2025. Except as the Secretary provides, a dividend paid or deemed paid by a controlled foreign corporation is not treated as a dividend under the older section 951(a)(2)(B) where it was paid on or before June 28, 2025 in a year including that date and the shareholder did not own the stock in the part of the year up to that date, or was paid after that date and before the corporation's first taxable year beginning after December 31, 2025, and where it does not raise the taxable income of a United States person subject to federal income tax.
What the document actually says“The amendments made by this section shall apply to taxable years of foreign corporations beginning after December 31, 2025.”
The changes start with foreign firm tax years that begin after December 31, 2025. Older years are left out.
A special rule covers some payouts in between. Those are not treated as dividends under the old rule. Two tests must be met for that.
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