Business and professional services and the OBBBA: Implications of tax changes

U.S. international tax reforms and tariff policy

American competitiveness: Tax rates for foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI) were initially designed to encourage U.S. companies to keep intangible assets and the associated profits within the United States. Together, they aim to balance American competitiveness globally with the federal government’s need for revenue.

The OBBBA maintains those concepts but modifies FDII and GILTI by:

• Modifying the calculations to remove exclusions based on fixed asset investment and soften expense allocation requirements
• Slightly increasing the corresponding effective tax rates (ETRs) and changing the foreign tax credit limitation
• Renaming to foreign-derived deduction eligible income (FDDEI) and net controlled-foreign-corporation-tested income (NCTI), respectively

FDII, now FDDEI: The FDII deduction regime is designed to encourage U.S. corporations to retain high-value functions, such as intellectual property ownership and sales operations, within the U.S. by offering a reduced ETR on income earned from exporting goods and services to foreign markets.

GILTI, now NCTI: NCTI is the closest domestic tax regime to an income inclusion rule (IIR) under the Organization for Economic Co-operation and Development’s (OECD) Pillar Two framework. On June 28, 2025, the G7 recognized that the U.S. minimum tax architecture, namely the NCTI regime and the corporate alternative minimum tax (CAMT), provides a functionally equivalent response to the OECD’s Pillar Two tax, sufficiently close in substance to avoid additional top-up taxes under OECD rules.

Profit shifting and base erosion: The base-erosion and anti-abuse tax (BEAT) is a minimum tax designed to prevent large multinational corporations from avoiding U.S. tax liability by shifting profits abroad. The OBBBA permanently lowered the scheduled BEAT rate from 12.5% to 10.5% and eliminated the unfavorable treatment of certain credits that could be applied against regular tax liabilities after Dec. 31, 2025. 

Learn more about U.S. international tax reforms in the OBBBA.

Tariffs: How tariffs continue to be applied could have profound implications for U.S. importers specifically and the economy in general. Depending on the details, increased tariffs could increase companies’ sourcing costs, affect export revenues if trading partners retaliate, and compel companies to further reconfigure their supply chains.

For example, many architecture firms and engineering firms building AI data centers have seen significant price increases, which they are compelled to pass on to customers. Consulting with tariff subject matter experts can in many cases produce refunds, reduce tariffs and/or even eliminate tariffs on a go-forward basis.