Andrew Mitchel LLC

International Tax Blog - New and Interesting International Tax Issues

Notes on the OBBB

2025-07-27

Below are my notes on selected international provisions of The One Big Beautiful Bill.[1]

  1. GILTI will be renamed "Net CFC tested income".[2] This term is abbreviated as "NCTI" and is pronounced "neck tie".[3]
  2. Deemed tangible income return (DTIR) will no longer be a component of GILTI / NCTI inclusions.[4]
  3. The haircut on indirect FTCs for GILTI / NCTI inclusions will be reduced from 20% to 10%.[5]
  4. DTIR will no longer be a component of FDII.[6]
  5. FDII will be renamed to FDDEI.[7]
  6. For years after 2025, the Code §250 deduction will be 33.34% for FDDEI and 40% for NCTI.[8]
  7. The limitation on downward attribution to US persons will be reinstated.[9]
  8. The limitation on downward attribution to US persons will not apply to a new (narrow) category of foreign controlled US shareholders.[10]
  9. The last day of the year rule for inclusions will be repealed. Inclusions will be pro rata based on the number of days owned during the year.[11]
  10. The CFC look-thru rule was made permanent.[12]
  11. The one-month deferral rule (typically allowing CFCs to have a November year-end) will be repealed.[13]
  12. Inventory produced in the US and sold through a foreign branch will be 50% foreign-source income, but only for purposes of computing the foreign tax credit limitation.[14]
  13. No 901 credit is allowed for 10% of foreign taxes paid on GILTI/NCTI PTEP distributions. [Added 12/13/25][15]

  1. PL 119-21, The One Big Beautiful Bill Act, or the "Act". ↑

  2. Section 70323 of the Act, amending Code §951A(a). Effective January 1, 2026. ↑

  3. International Fiscal Association, USA Branch, Young IFA Network (YIN), Trilateral Webinar on July 23, 2025. ↑

  4. Section 70323 of the Act, amending Code §951A. Effective January 1, 2026. ↑

  5. Section 70312 of the Act, amending Code §960(d)(1). Effective January 1, 2026. ↑

  6. Section 70323 of the Act, amending Code §250. Effective January 1, 2026. ↑

  7. Section 70323 of the Act, amending Code §250. Effective January 1, 2026. ↑

  8. Section 70321 of the Act, amending Code §250. Effective January 1, 2026. ↑

  9. Section 70353 of the Act, amending Code §958(b)(4). Effective January 1, 2026. ↑

  10. Section 70353 of the Act, creating new Code §951B. Effective January 1, 2026. ↑

  11. Section 70354 of the Act, amending Code §951(a). Effective January 1, 2026. ↑

  12. Section 70351 of the Act, amending Code §954(c)(6). Effective January 1, 2026. ↑

  13. Section 70352 of the Act, amending Code §898(c). Effective December 1, 2025. ↑

  14. Section 70313 of the Act, amending Code §904(b)(6). Effective January 1, 2026. ↑

  15. Section 70312 of the Act, amending Code §960(d)(4). Effective June 28, 2025. ↑

Tags: 250 GILTI & FDII Deductions, 901 Foreign Tax Credits, 951 Subpart F Income, 951A GILTI, 958 Direct & Indirect O'ship Rules, 960 Deemed Paid Foreign Taxes

CATEGORIES

DISCLAIMER

The posts on this blog have not been verified for accuracy. You should consult an attorney for legal advice regarding your own situation. These posts are not updated for changes in the tax laws. Further, these posts should not be relied upon for any purpose whatsoever.


Copyright © 2004 – 2026, Andrew Mitchel LLC. All rights reserved.