Understand the new tax rules that may impact your international operations
In a global environment marked by increasing competition and tax tensions among countries, the United States begins 2025 with significant tax changes that directly affect foreign companies investing, operating, or conducting business in the country.
With new regulations such as Section 899 — targeting the taxation of passive income — and modifications to the GILTI, FDII, and BEAT regimes, the need to adapt becomes urgent. These changes require a review of corporate structures, international contracts, and tax planning strategies.
In this material, we explain the main changes and how your company can prepare to protect its results.
What Changes for Foreign Companies in 2025?
Is your company ready to address:
- Additional taxation on profits, interest, or dividends received in the U.S.?
- Reduction of advantageous tax deductions?
- New obligations under regimes like GILTI and BEAT?
- Impact on holding structures and profit repatriation?
These changes are significant.
Section 899: New Taxation on Passive Income
The most controversial change comes in the form of Section 899, proposed by the U.S. Congress as a response to foreign tax regimes deemed harmful to U.S. interests.
What is Section 899?
It is a new rule allowing the U.S. to impose a tax of 20% to 30% on passive income (such as interest, dividends, royalties, and rents) received by foreigners if the investor’s home country taxes American companies in a manner considered “unfair,” as in cases of digital tax, global minimum tax, or excessive profit retention.
Direct impact:
• Affects foreign investors with U.S. assets
• May reduce the attractiveness of investing in the U.S.
• Creates uncertainty for holding companies and international planning structures
📅 Expected effective date: between 2026 and 2027, but companies should act now to prepare.
GILTI, FDII, and BEAT: Lower Deductions, Higher Taxes
In addition to Section 899, strategic deductions that previously helped multinational companies reduce their U.S. tax burden are being revised:
GILTI (Global Intangible Low-Taxed Income)
• Before: 50% deduction, effective tax rate of 10.5%
• Now (from 2026): deduction reduced to 37.5%, increasing the tax rate to 13.125%
FDII (Foreign-Derived Intangible Income)
• Before: 37.5% deduction, effective tax rate of 13.125%
• Now: deduction reduced to 21.875%, effective rate increased to 16.406%
BEAT (Base Erosion and Anti-Abuse Tax)
• Rate increases from 10% to 12.5% in 2026
These changes directly affect multinational groups using subsidiaries for export operations, services, or licensing.
International Tax Conflict: The U.S. vs. the Global Minimum Tax
Another highlight of 2025 is the intensification of the dispute between the U.S. and international organizations such as the OECD. The U.S. government reaffirms that it will not follow the global tax pact establishing a 15% minimum tax on multinational profits.
What does this mean?
• The U.S. chooses its own sovereign rules
• Rejects mandatory taxation aligned with OECD standards
• Creates tools to “retaliate” against countries adopting the global model
This stance also supports the creation of Section 899 as a mechanism to protect U.S. tax revenue.
Other Relevant Changes for 2025
Beyond the main regimes, other changes deserve attention:
• End of accelerated asset depreciation (bonus depreciation)
• Review of research and development (R&D) tax credits
• Risk of expiration for revenue exclusions and regional tax benefits
Together, these factors reduce the fiscal flexibility of foreign companies.
Conclusion
The U.S. tax changes in 2025 represent more than mere technical adjustments. They reflect a new U.S. government posture toward foreign companies, requiring immediate strategic planning.
Is your company ready to face this new tax environment?
The Drummond Advisors team is prepared to guide your business with customized compliance and international tax planning strategies.
Contact our specialists via the available chat and find out how to protect your operations and investments in the United States.
Written by Marcos Ferreira, Content Analyst at Drummond Advisors
References:
https://www.reuters.com/business/finance/investment-groups-call-exemption-passive-income-us-tax-bill-2025-06-24
https://taxfoundation.org/research/all/global/us-international-tax-reform-beat-fdii-gilti
https://www.bakermckenzie.com/en/insight/publications/2025/06/us-section-899-analysis
https://www.ey.com/en_us/tax/united-states-new-irc-section-899-overview