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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 The last day of the year rule for inclusions will be repealed.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 The one-month deferral rule (typically allowing CFCs to have a November year-end) will be repealed.[13]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
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