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USAFEDERAL TAX
The One Big Beautiful Bill Act: what changes for businesses in 2026
Signed on July 4, 2025, the law made key business incentives permanent and reshaped US international tax rules from 2026. Here is what companies operating in the United States should review.
By the True CPA Tax TeamOctober 1, 20267 min read
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, is the most significant US federal tax legislation since the 2017 Tax Cuts and Jobs Act. It makes several business provisions permanent and introduces new international rules for tax years beginning after December 31, 2025.
Business incentives made permanent
100% bonus depreciation for qualifying property acquired after January 19, 2025.
Immediate expensing of domestic R&D costs under the new Section 174A. Foreign research is still amortized over 15 years, and smaller businesses may apply the change retroactively.
Business interest deduction (Section 163(j)) again based on EBITDA, which increases the deductible amount for capital-intensive companies.
20% qualified business income deduction for pass-through entities, now permanent.
International changes from 2026
GILTI becomes Net CFC Tested Income (NCTI), with the Section 250 deduction reduced to 40%.
FDII becomes Foreign-Derived Deduction Eligible Income (FDDEI), with the deduction reduced to 33.34%.
The deemed-paid foreign tax credit rises from 80% to 90%.
The BEAT rate is set permanently at 10.5%.
What to review now
01Capital spending: time asset purchases to capture 100% bonus depreciation.
02R&D: map domestic research costs and evaluate catch-up options for prior years.
03Financing: recalculate the interest limitation using the EBITDA base.
04Cross-border structure: model NCTI, FDDEI and foreign tax credits for 2026.
05Transfer pricing: align intercompany charges with the new incentives.
Please note: Treasury and IRS guidance on the OBBBA continues to be issued. Confirm each provision against the latest regulations before filing.
HOW TRUE CPA CAN HELPWe help US subsidiaries and Latin American groups with US operations model the impact of the OBBBA and align their intercompany structure.Talk to a specialist
Legal basisOne Big Beautiful Bill Act (signed July 4, 2025) · Internal Revenue Code §§ 168(k), 174A, 163(j), 199A, 250 and 59A.This content is for information only and does not replace an analysis of each specific case.
