Fairness and Accountability in International Taxation Act of 2005

H.R. 1303, the Fairness and Accountability in International Taxation Act of 2005, seeks to limit the ability of foreign corporations to use international tax treaties to reduce their U.S. tax obligations. The bill would deny lower tax rates on payments made by U.S. companies to related foreign entities unless those entities are primarily owned by residents of the treaty country or maintain significant business operations there. By tightening these rules and adjusting how income is allocated in transactions involving tax havens, the legislation aims to prevent companies from shifting profits overseas to avoid paying U.S. corporate income taxes.