Unfair Tax Prevention Act

HR 4695, the Unfair Tax Prevention Act, amends the tax code to create special rules for certain foreign-controlled companies operating under specific foreign tax regimes. It directly affects multinational entities controlled by foreign owners that face "extraterritorial taxes" (taxes based on income connections through ownership chains, not direct ownership). Key provisions include treating these entities as "applicable taxpayers" for base erosion rules, changing a key deadline to the bill's enactment date, and requiring 50% of their cost of goods sold to be counted as a tax benefit. This targets tax avoidance strategies used by some foreign-owned businesses in jurisdictions with complex cross-border tax structures. The changes apply to taxable years beginning after the bill's enactment.