U.S. Sens. Shelley Moore Capito (R-WV), John Cornyn (R-TX), Marsha Blackburn (R-TN), and Jon Husted (R-OH) introduced a bill that seeks to repeal the adjusted tax income (ATI) limitation exclusion of global income.
The Ensuring Better Interest Treatment and Deductibility (EBITDA) Act would allow U.S. businesses to include global income – including Subpart F income, GILTI inclusions, and Section 78 gross-up amounts — in their adjusted tax income (ATI). GILTI is a U.S. tax on certain foreign earnings of controlled foreign corporations owned by U.S. shareholders.
“U.S. based companies are at a disadvantage when competing in global markets for leveraged acquisitions, as foreign-headquartered rivals often benefit from more favorable interest deductibility rules and can therefore finance transactions more efficiently,” Capito said. “This bill will help ensure pro-growth policy by increasing globally competitive interest deductibility standards and will help unleash domestic investments for U.S. companies.”
The legislation is supported by: the National Association of Manufacturers (NAM), U.S. Chamber of Commerce, Celanese, Asurion, Dell Technologies, Illinois Tool Works, and the American Chemistry Council.
“The Ensuring Better Treatment and Deductibility Act is an important step toward preserving a competitive, pro-growth tax environment for American companies. Restoring a more balanced approach to interest deductibility – consistent with longstanding standards – will help businesses invest in long-term growth and compete globally. Asurion applauds Senators Capito, Cornyn, Blackburn, and Husted for introducing this important legislation,” Asurion officials said.
A companion bill is being introduced in the U.S. House of Representatives by Rep. Ron Estes (R-KS).
“Dell Technologies supports the Ensuring Better Interest Treatment and Deductibility Act (EBITA) because it enhances financing flexibility for U.S. businesses. We appreciate Senator Capito, Representative Estes and their colleagues for working to advance this legislation,” Tom Vallone, senior vice president of taxes at Dell Technologies, said.