Subpart F (Tax) Law and Legal Definition

Subpart F of U.S. Tax code consists of the federal government's system of "anti-deferral" rules, which lead to the taxation of certain kinds of foreign-source income in the year it was earned even though the U.S. parent company did not repatriate those profits during the year.

Some of these rules considered for reform include Base Company Rules and Look Through Rules.

For example, The foreign base company rules were enacted in 1962 as part of the original enactment of Subpart F. The original intent of Congress in enacting these rules was to prevent taxpayers from shifting "passive" income from high-tax jurisdictions (either the United States or high-tax foreign nations) to low-tax jurisdictions.