1. Short title This Act may be cited as the Unfair Tax Prevention Act . 2. Application of the base erosion and anti-abuse tax with respect to certain entities connected to extraterritorial tax jurisdictions (a) In general Section 59A of the Internal Revenue Code of 1986 is amended by redesignating subsection (i) as subsection (j) and inserting after subsection (h) the following new subsection: (i) Special rules for foreign-Owned extraterritorial tax regime entities (1) In general In the case of any foreign-owned extraterritorial tax regime entity— (A) such entity shall be treated as described in subparagraphs (B) and (C) of subsection (e)(1) for purposes of determining whether such entity is an applicable taxpayer, (B) subsection (b)(2) shall be applied by substituting the date of the enactment of subsection (i) for December 31, 2025 , (C) subsections (c)(2)(B), (c)(4)(B)(ii), and (d)(5) shall not apply, and (D) 50 percent of such entity’s cost of goods sold shall be treated as a base erosion tax benefit with respect to a base erosion payment. (2) Foreign-owned extraterritorial tax regime entity For purposes of this subsection— (A) In general The term ‘foreign-owned extraterritorial tax regime entity’ means any taxpayer which is controlled by a foreign entity (other than a foreign entity controlled by any domestic corporation) if any of the following entities is subject to an extraterritorial tax: (i) Any foreign entity which controls the taxpayer. (ii) Any foreign entity which is controlled by— (I) the taxpayer, or (II) any foreign entity described in clause (i). (iii) Any trade or business of any foreign entity described in clause (i) or (ii). (B) Extraterritorial tax (i) In general The term extraterritorial tax means any tax imposed by a foreign country on a corporation (including any trade or business of such corporation) which is determined by reference to any income or profits received by any person (including any trade or business of any person) by reason of such person being connected to such corporation