undefinedSummary#-summary
For example, if interest or royalty payments from a U.S. corporation to a non-U.S. affiliate are currently exempt from U.S. withholding tax under a treaty, the applicable rate under Section 899 would begin at 5% in the first year, increasing incrementally thereafter.
By applying increased rates on top of treaty-based rates, the proposed legislation effectively overrides certain U.S. tax treaty obligations,a significant departure from longstanding treaty commitments.
undefinedObscure Tax Item in Trump’s Big Bill Alarms Wall Street#-obscure-tax-item-in-trumps-big-bill-alarms-wall-streetundefined#--2https://www.msn.com/en-us/money/mar...ump-s-big-bill-alarms-wall-street/ar-AA1FJCAV
"The item , introduced in legislation that passed the House last week as Section 899 and titled “Enforcement of Remedies Against Unfair Foreign Taxes” , calls for, among other things, increasing tax rates for individuals and companies from countries whose tax policies the US deems “discriminatory.” This includes raising tax rates on passive income, such as interest and dividends, earned by investors who are potentially sitting on trillions in American assets."
undefinedReporting Obligations for Foreign-Owned U.S. Corporations With Form 5472#-reporting-obligations-for-foreign-owned-u-s-corporations-with-form-5472https://www.forbes.com/sites/priyar...g-beautiful-bill-challenges-global-investors/
undefinedOne Big Beautiful Bill Act#-one-big-beautiful-bill-acthttps://www.congress.gov/bill/119th-congress/house-bill/1/text
P.S Time for those holding US assets to dump them if this bill passes as is?
- Proposed Section 899 would significantly increase U.S. federal income tax rates,by 5% to 20%,on certain types of income earned by non-U.S. individuals and entities that are tax residents of, or are established or effectively managed in, “discriminatory foreign countries.” These jurisdictions are defined as those that impose an “unfair foreign tax” under the proposed legislation.
- These elevated rates would apply to passive U.S. source income (such as dividends, interest, royalties, and rents), as well as income effectively connected with a U.S. trade or business (ECI).
- The legislation defines “unfair foreign taxes” broadly, encompassing digital services taxes and other measures that have been widely adopted by foreign jurisdictions. As a result, a large number of non-U.S. individuals and entities could fall within the scope of the increased tax rates.
- These higher rates would apply across a broad spectrum of existing tax provisions and would affect nonresident individuals, foreign corporations, and even sovereign entities.
- If enacted, Section 899 would introduce substantial economic and compliance challenges, particularly for foreign governments, multinational enterprises, and investors with connections to jurisdictions that impose taxes perceived to disproportionately impact U.S. interests,such as digital services taxes or global minimum tax regimes.
- Taxpayers potentially impacted by this proposal should carefully assess how their U.S. tax exposure could change under the new rules and evaluate possible strategies to mitigate adverse effects.
For example, if interest or royalty payments from a U.S. corporation to a non-U.S. affiliate are currently exempt from U.S. withholding tax under a treaty, the applicable rate under Section 899 would begin at 5% in the first year, increasing incrementally thereafter.
By applying increased rates on top of treaty-based rates, the proposed legislation effectively overrides certain U.S. tax treaty obligations,a significant departure from longstanding treaty commitments.
undefinedObscure Tax Item in Trump’s Big Bill Alarms Wall Street#-obscure-tax-item-in-trumps-big-bill-alarms-wall-streetundefined#--2https://www.msn.com/en-us/money/mar...ump-s-big-bill-alarms-wall-street/ar-AA1FJCAV
"The item , introduced in legislation that passed the House last week as Section 899 and titled “Enforcement of Remedies Against Unfair Foreign Taxes” , calls for, among other things, increasing tax rates for individuals and companies from countries whose tax policies the US deems “discriminatory.” This includes raising tax rates on passive income, such as interest and dividends, earned by investors who are potentially sitting on trillions in American assets."
undefinedReporting Obligations for Foreign-Owned U.S. Corporations With Form 5472#-reporting-obligations-for-foreign-owned-u-s-corporations-with-form-5472https://www.forbes.com/sites/priyar...g-beautiful-bill-challenges-global-investors/
undefinedOne Big Beautiful Bill Act#-one-big-beautiful-bill-acthttps://www.congress.gov/bill/119th-congress/house-bill/1/text
P.S Time for those holding US assets to dump them if this bill passes as is?
