Overview

• The ‘One Big Beautiful Bill Act’ cleared the House on May 22 and is now before the Senate for consideration.
• Section 899 would impose an additional 5 percentage-point withholding tax each year on U.S. income derived from investors in countries with discriminatory or extraterritorial taxes.
• Digital-services levies, diverted-profits taxes and undertaxed-profits rules in France, Germany and the U.K. are specifically targeted under the provision.
• The Joint Committee on Taxation estimates Section 899 would generate about $116 billion over 10 years, with its withholding tax provisions set to begin January 1, 2026 if the bill is enacted by October 3.
• Critics warn Section 899 may prompt foreign capital flight, weaken the dollar and chill demand for U.S. Treasuries.