The OBBBA International Tax Provisions
A Nutshell Explanation
H. David Rosenbloom
Member, Caplin & Drysdale Chartered, Washington D.C.
Fadi Shaheen
Professor of Law and Professor Charles Davenport Scholar,
Rutgers Law School
The One Big Beautiful Bill Act of 2025 made a number of complex changes to the U.S. international tax system. In general, these changes are highly technical and do not dramatically alter the pre-existing text of the Internal Revenue Code, but some of them appear to have far-reaching consequences. This article provides a nutshell explanation of these changes to readers who are only somewhat familiar with U.S. international tax law.
Indice
- Introduction
- U.S. taxation and foreign tax credit basics
- CFC and subpart F
- The TCJA framework: participation exemption, GILTI, and FDII
- OBBBA changes to NCTI and FDDEI
- Additional OBBBA changes to CFC rules
- BEAT adjustments
- Research and experimental expenditures
- New foreign-source income rule for foreign tax credit purposes
- Conclusion