A Closer Look at How Proposed Section 899 Would Increase Tax Rates for Certain Non-US Persons and Governments

On May 22, 2025, the House passed the One Big Beautiful Bill Act of 2025 as modified by the manager's amendment from the Rules Committee. No modifications were made to the retaliatory tax provision in proposed section 899, which has garnered interest from US inbound companies.

The House bill includes an updated version of proposed section 899, a provision aimed at retaliating against the Under Taxed Profits Rule (UTPR) under the OECD's Pillar Two project, as well as unilateral measures, such as Digital Services Taxes (DSTs).

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