II 109th CONGRESS 1st Session S. 1363 IN THE SENATE OF THE UNITED STATES June 30, 2005 Mr. Baucus (for himself, Mr. Jeffords, and Mr. Kerry) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to prevent dividends received from corporations in tax havens from receiving a reduced tax rate.

1.

Modification to the definition of qualified foreign corporation

(a)

In general

Clause (ii) of section 1(h)(11)(C) of the Internal Revenue Code of 1986 (relating to dividends on stock readily tradable on United States securities market) is amended by striking by such corporation if the stock and all that follows and inserting by such corporation if—(I)the stock with respect to which such dividend is paid is readily tradable on an established securities market in the United States, and (II)such corporation is created or organized under the laws of a foreign country which has a comprehensive income tax system which the Secretary determines is satisfactory for the purposes of this paragraph. . (b)

Effective date

The amendment made by this section shall apply to dividends received after the date of the enactment of this Act.