What Changed?

In 2025, the U.S. Congress advanced the One Big Beautiful Bill Act (H.R.1) — a broad package that extends and adjusts significant portions of U.S. tax policy, refines international rules (GILTI/FDII), and reinforces pro-domestic investment measures. For Brazilian groups with U.S. subsidiaries, these changes affect global effective tax rates, documentation, and remittances.

Package Overview

  • Extended and adjusted pro-business incentives (e.g., immediate expensing and enhancements to Section 199A/QBI deduction).
  • Stricter international rules: modifications to GILTI and FDII that increase the effective tax rate on foreign income and redefine calculation bases.
  • Worker/consumer-focused provisions (e.g., favorable treatment of tips and overtime), indirectly impacting payroll costs.

Translation in practice: stronger incentives to invest and produce in the U.S., but greater scrutiny and potential costs for structures involving intangibles and services between Brazil ↔ U.S.

What’s Changing in International Taxation

1) GILTI: Reduced Section 250 Deduction
The bill reduces the GILTI deduction (Section 250) from 50% to 40% for tax years beginning after December 31, 2025.

  • Result: effective GILTI rate ≈ 12.6% (or ~14% considering the 90% foreign tax credit, per technical analysis).
  • Implication for BR→U.S. groups: structures concentrating profits in low-tax jurisdictions will require repricing and value chain reassessment.

2) FDII: Slightly Lower Benefit
The FDII deduction falls from 37.5% to 33.34% (after 12/31/2025), raising the effective rate to ~14% on eligible income. Companies exporting from U.S. operations will see reduced benefits and must recalibrate commercial/contractual policies.

3) Other Relevant Provisions

  • Section 199A (QBI): 20% deduction maintained and made permanent, benefiting certain pass-through structures (not C-Corps). Impacts holding structures and check-the-box elections.
  • Expensing: restored 100% immediate expensing for eligible investments, supporting CAPEX and reshoring.

States and Economic Nexus: Ongoing Monitoring

While the OBBB is federal, state tax rules keep evolving. In 2025, several states eliminated the 200-transaction threshold, retaining only revenue-based thresholds (e.g., $100K / $500K). This simplifies analysis but still requires registration and sales tax collection once thresholds are met.

For Brazilian e-commerce and SaaS groups: update your state-by-state dashboards. The removal of the transaction count changes the timing of obligations but does not eliminate exposure.

Key Impacts for Brazilian Companies

  • Higher effective tax rates on GILTI income and reduced FDII benefits → increased sensitivity in IP and cost-sharing planning.
  • Renewed incentives to invest and produce in the U.S. (expensing and QBI) → may offset GILTI/FDII impact in operational scenarios.
  • Multijurisdictional compliance remains critical: Wayfair continues to define nexus; 2025 brought threshold changes in several states.

Action Plan

1) Tax Modeling (Parent vs. U.S.)

  • Update ETR models considering GILTI 40% / FDII 33.34%.
  • Simulate repricing scenarios for IP services/management fees.

2) Value Chain & IP Review

  • Reassess where value is created and how it is compensated (royalties, cost sharing, buy-ins).
  • Consider partial onshoring when expensing and credits outweigh the relative FDII loss.

3) Governance & Documentation

  • Update Master/Local File and benchmark studies; prepare for heightened scrutiny of intercompany transactions.
  • Conduct nexus diagnostics by state; adjust registrations and filings according to new thresholds.

4) Entity Strategy

  • Reevaluate pass-throughs vs. C-Corps in light of Section 199A (20%) and distribution objectives.

Mistakes to Avoid

❌ Treating OBBB as “just an extension of TCJA” without considering updated GILTI/FDII rules.
❌ Ignoring state nexus because “we don’t have physical presence.” Wayfair still governs.
❌ Delaying IP/service repricing until year-end — the impact is cumulative.

How Drummond Can Help

Drummond Advisors integrates international tax, corporate, and accounting planning with a Brazil–U.S. focus. We deliver:

  • GILTI/FDII modeling and cash tax planning
  • Transfer pricing studies and intercompany governance
  • Multistate tax support: nexus, registrations, sales/income tax
  • Structuring (pass-through vs. C-Corp) and CAPEX planning with expensing

📩 Schedule an OBBB Impact Sprint (2–3 weeks): diagnostic, scenario modeling, and prioritized tactical plan.

Quick FAQ

Does OBBB increase the standard federal corporate tax rate?
No general rate increase has been reported; the focus is on extensions/adjustments and international rules (GILTI/FDII), plus pro-investment incentives.

When do GILTI/FDII changes take effect?
Generally, for fiscal years beginning after 12/31/2025. Verify your company’s fiscal year.

Did states change nexus rules?
Yes, several removed the 200-transaction trigger in 2025, keeping only revenue-based thresholds.


Written by Marcos Ferreira, Content Analyst at Drummond Advisors