Foreign Tax Simplification Act of 1992

Foreign Tax Simplification Act of 1992 - Amends the Internal Revenue Code to exempt foreign persons (including corporations) from the uniform capitalization rules in determining earnings and profits for any business not conducted in the United States.

Declares that a foreign corporation shall not be considered a passive foreign investment company for any day on which such corporation was a controlled foreign corporation.

Revises the application of the separate foreign tax credit limitation for foreign corporations in which U.S. parent companies do not own a controlling interest.

Requires that foreign tax credits claimed for foreign income be translated into dollars by using the average exchange rate for the taxable year to which such taxes relate. Provides an exception for taxes not paid within the following two years, and for inflationary currency. Provides for translating taxes not subject to such requirement. Sets forth special rules for making adjustments to accrued taxes not paid within two years. Allows the use of the average exchange rate for the period during which the taxes or adjustment is paid instead of the exchange rate as of the time of such payment.

Provides that the look-through rules for controlled foreign corporations do not apply to companies with less than $1 million in all of their separate categories.