Senator Dorgan (D-N.D.) has introduced a bill (S. 779) to amend the Internal Revenue Code to treat controlled foreign corporations established in tax havens, or “tax-haven CFCs,” as domestic corporations, and thus subject to U.S. income taxes. The tax havens listed in the bill include Bermuda, the British Virgin Islands, and the Cayman Islands.

The corporation must be a controlled foreign corporation for an uninterrupted period of 30 days or more during the taxable year in order to be treated as a tax-haven CFC. Generally, a foreign corporation is treated as a controlled foreign corporation if more than 50 percent of its vote or value is owned by US persons owning 10 percent or more of its voting stock.

Please click here to see the draft bill.

Many thanks to Deloitte & Touche for the "heads up".