Fairness and Accountability in International Taxation Act of 2003

Fairness and Accountability in International Taxation Act of 2003 - Amends the Internal Revenue Code to deny reduced withholding tax treaty benefits to a foreign entity on any deductible foreign payment (deductible payment made by a domestic entity to a related foreign entity) unless such entity is predominantly owned by individuals who are residents of such foreign country. Exempts from such provision: (1) corporations with substantial business activities in a treaty country with specified tax rates; (2) payments received by controlled foreign corporations from U.S. shareholders; and (3) certain conduit payments made by foreign corporations.Provides a special income and deduction allocation rule for related-party inbound (transfer price increased by deflected tax haven income) and outbound (transfer price increased by deflected tax haven income) transactions. Defines "related-party inbound transaction," "related-party outbound transaction," and "deflected tax haven."