Unpacking the big beautiful international tax provisions of the One Big Beautiful Bill

Although the majority of the tax bill introduced by the House Committee on Ways and Means on May 12, 2025 is focused on the Administration’s domestic agenda, the bill includes some material changes to the international tax rules, as well as a change to the Tariff Act of 1930 (Tariff Act). The international tax changes include:

• A new section 899 regarding the imposition of unfair taxes by foreign governments on US persons, 
• Permanent extension of the current section 250 deduction for foreign-derived intangible income and global intangible low-taxed income (GILTI),
• Permanent extension of the current base erosion anti-abuse tax rate, 
• An exemption from GILTI for certain income earned in the US Virgin Islands,
• Maintaining capitalization requirements for foreign research or experimental expenditures,
• Repeal of the de minimis entry privilege and expanding the civil penalties under the Tariff Act, and
• Limiting the drawback of excise taxes paid with respect to substituted merchandise. 

The proposed legislation is now with the House Rules Committee, where a modified version has been reported (which did not substantively modify the international provisions discussed in the legal alert). The goal is for the House to pass the budget reconciliation bill prior to Memorial Day and for both the House and the Senate to pass the bill in time for the President to sign it into law on July 4, 2025.

Read the full legal alert here.