Tax Notes Talk Moving Forward: International Tax After the OBBBA
Aug 1, 2025
Alan Cole, a senior economist at the Tax Foundation, sheds light on the One Big Beautiful Bill Act's international tax provisions. He discusses crucial reforms like GILTI, FDII, and BEAT, emphasizing their impact on multinational corporations. The conversation dives into the contrasting House and Senate perspectives, revealing how political dynamics shaped legislative choices. Cole also examines changes in U.S. tax policy, particularly modifications to the CFC look-through rule, and the rising challenges of digital services taxes for U.S. businesses.
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OBBBA as TCJA 2.0 Update
- The international tax changes in the OBBBA mostly represent a TCJA 2.0 update rather than a major overhaul.
- Limited political majority and consistent party control restrained radical reforms.
End of Intangible Focus in Tax
- OBBBA removes QBAI subtraction from global intangible and domestic intangible income taxes.
- This shift reduces focus on intangibles and represents a Trump-era ideological change.
BEAT Changes and High Tax Exemption
- BEAT rate was increased moderately but some proposed high tax exemptions were dropped due to high revenue cost.
- The legislation sought to keep overall revenue neutral on international taxes within constraints.