Tax News & Views International Weekly: New Big Beautiful Revisions

Two Republican members of Congress released a bill last week to tweak a key feature of the 2025 One Big Beautiful Bill Act, which they said would “unleash domestic investment” by U.S. companies.

The legislation, sponsored by Rep. Ron Estes, R-Kan., and Sen. Shelly Moore Capito, R-W. Va., could increase how much business interest companies can deduct under I.R.C. Sec. 163(j), which sets a limit on interest deductibility based on a company’s overall taxable income. While the OBBBA loosened the limit by allowing companies to exclude depreciation and amortization in the calculation, it also nixed some forms of offshore earnings, such as Subpart F income, from the formula as well.

According to Estes, who sits on the House Ways and Means Committee, this penalizes American companies who go into debt to expand operations abroad.

“They shouldn’t be slammed with a surprise tax bill because they’re investing in their operations,” Estes said.

Aside from Subpart F, the bill would also allow companies to include net CFC tested income (NCTI)—formerly known as global intangible low-taxed income or GILTI—and other forms of offshore income. By adding more income into the calculation, the limit on business interest deductibility would also be higher for most companies.

There could be more bills like this, given the complexity of the OBBBA and how many changes were made during its passage, including to meet revenue targets. This is especially true for the international provisions.

For instance, many business organizations hoped that the changes to GILTI would allow companies to carry forward losses and unused foreign tax credits–something that would bring it closer in line to the Organization for Economic Cooperation and Development’s global minimum tax. Earlier versions of the bill would also have gone further to reduce the impact of the base erosion and anti-abuse tax as well, with changes such as an exemption on payments to high-tax jurisdictions. Those were also not included in the final law.

Now that the final law is in the books and being implemented, lawmakers may look to smooth out some of the rougher parts of the bill. But they’ll need both a legislative vehicle and, potentially, a source of revenue to pay for the cost. While there’s been talk of a second reconciliation bill and a bipartisan “extenders” package, it’s unclear whether either will have the room for a host of changes.

Noteworthy Items This Week

U.N. to Issue Guidance for AI Use in Tax Administration – Sarah Paez, Tax Notes ($):

According to Jeneba Bangura, co-coordinator of the newly established Subcommittee on Tax Administration and Artificial Intelligence and commissioner general of Sierra Leone's National Revenue Authority, said the guidance will prioritize practical examples of AI usage in tax administration and case studies, with a focus on implementing AI in developing countries’ tax administrations.

U.N. tax committee members are appointed by their countries’ governments but serve in a personal capacity and do not represent the views of their governments.

The AI subcommittee would outline the purpose and scope of the guidance and provide the policy rationale for using AI tools, like improving tax administration efficiency, strengthening compliance, enhancing services, and raising revenue, according to a conference room paper laying out the work plan.

EU Resists Calls To Suspend Carbon Tax On Fertilizers – Eleanor Butler, Law360 Tax Authority ($):

After a meeting of the Agriculture and Fisheries Council on Monday, the European Commission stressed that suspending the carbon border adjustment mechanism on these goods could increase EU dependency on fertilizer imports and create uncertainty around decarbonization investment.

The CBAM, which entered into force in January, imposes a tax on energy-intensive goods imported into the EU. The aim is to prevent what's known as carbon leakage, dissuading companies in the bloc from shifting production to non-EU countries with weaker climate policies.

IRS Advance Pricing Agreement Backlog Grew After Departures – Caleb Harshberger, Bloomberg Tax ($):

The IRS completed fewer advance pricing agreements last year after departures from the agency’s Advance Pricing and Mutual Agreement Program, worsening a growing backlog of pending agreements amid increased demand from taxpayers.

APMA executed 110 advance pricing agreements in 2025, according to the office’s annual report released Monday, down from 142 the year before and 156 in 2023. APAs apply to transfer pricing arrangements—valuing transactions between related companies for taxation purposes.

The decline came as staffing levels at the office fell to 108, from 126 in 2024, after last year’s widespread cuts and departures at the agency.

Apple’s Ireland Unit Paid $12.1 Billion in Taxes in Fiscal 2025 – Michael Rapoport, Bloomberg Tax ($):

Apple Inc.’s primary Irish subsidiary paid $12.1 billion in taxes in fiscal 2025, according to financial statements issued Tuesday.

That amount included $1.4 billion paid under the global minimum tax by Apple Operations International Ltd. for the fiscal year ending Sept. 27, 2025.

The minimum tax, under Pillar Two of the OECD’s 2021 global tax agreement, requires companies to pay at least 15% in taxes in any country where they record income.

Tussling for Tariff Refunds – Lee A. Sheppard, Tax Notes ($):

The Supreme Court held that President Trump’s emergency tariffs were illegal and unconstitutional. Trump responded with a hissy fit and coldness toward the justices at his State of the Union address.

He should not have done that, not merely because it was unbecoming, but because his lawyers should have prepared him for a loss. Instead, Cabinet members did the rounds talking up the likelihood of victory and alluding to the dire consequences of a defeat.

The Trump appointees who voted with the majority did what they were put on the Court to do — restrain executive power and restrict expansive readings of statutes. Trump was correct in his impression that, had the shoe been on the other foot, the Court’s liberals would have embraced an expansive interpretation of the statute. But the Court has to think about the executive branch and separation of powers. Put another way, would any constitutional conservative want to give that kind of power to Gavin Newsom?

Public Domain Superhero of the Week

Every week, a new character from the Golden Age of Comics, who’s fallen out of use.

This week’s entry: Midnight

Debut Year: 1941

Debut Publication: Smash Comics #18

Origin Story: A radio announcer, he began to act out the life of a crimefighter character he voiced for the station.

Superpowers: An avid boxer, Midnight also has a gun loaded with sleep-darts and a two-way radio.

Eide Bailly's International Tax Team and our affiliates at HLB, The Global Advisory and Accounting Network, stand ready to assist with your worldwide tax needs.

Tax News & Views International Weekly: New Big Beautiful Revisions

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Alex Parker