U.S. Treasury Seeks Removal of Retaliatory Tax Provision in BBB Bill

Treasury Secretary Scott Bessent has called on Congress to eliminate Section 899 from the 'Big, Beautiful Budget' (BBB) bill, a Trump-era provision designed to impose additional taxes on foreign companies and investors in response to harsh international tax policies. The MOVE follows an understanding reached with G7 nations, rendering the retaliatory measure obsolete.

Section 899 was initially crafted to counter the OECD's Pillar 2 global minimum tax rules, which targeted U.S. multinationals. However, Bessent argues the provision no longer holds relevance as the Treasury has effectively exempted American companies from Pillar 2 enforcement. The shift reflects evolving economic diplomacy and a departure from the Biden administration's earlier stance on corporate tax harmonization.

The Treasury's decision marks a strategic retreat from the 2021 OECD agreement, which sought to enforce a 15% global minimum corporate tax rate. With U.S. firms now shielded from cross-border tax top-ups, the international tax landscape enters uncharted territory—potentially reshaping competitive dynamics for multinational enterprises.