U.S. businesses operating globally have long wrestled with the complexities of cross-border taxation. The One Big Beautiful Bill Act (OBBBA), signed into law in July 2025, brings clarity and permanence to several key international tax provisions originally introduced under the 2017 Tax Cuts and Jobs Act (TCJA). For CFOs, tax directors and executive leaders, the changes represent both a stabilizing force in international tax planning and a new baseline for long-term compliance.
The Tax Cuts and Jobs Act (TCJA) introduced a fundamentally new approach to international taxation in the U.S., shifting the focus toward discouraging the offshoring of intellectual property and profits. Central to that shift were three key provisions: Global Intangible Low-taxed Income (GILTI), Foreign-derived Intangible Income (FDII) and the Base Erosion and Anti-abuse Tax (BEAT).
GILTI imposed a minimum tax on certain foreign earnings of U.S. shareholders in controlled foreign corporations, targeting income perceived to be shifted to low-tax jurisdictions. FDII, by contrast, rewarded companies that generated income from serving foreign markets using U.S.-based intangible assets, offering a preferential tax rate on such earnings. Meanwhile, the BEAT was designed to curb base erosion practices by levying an additional tax on large U.S. corporations that significantly reduced their U.S. tax liability through deductible payments to related foreign affiliates.
Please select this link to read the complete article from OSAP Mission Partner Clark Schaefer Hackett (CSH).