One Big Beautiful Bill Act Risks Unintended Tax Burden Shift onto U.S. Borrowers’ Shoulders, Experts Warn

A recently passed legislative measure named the One Big Beautiful Bill Act by the House of Representatives on May 22 has introduced a new element to the Internal Revenue Code: Section 899. The section, labeled “Enforcement of remedies against unfair foreign taxes,” is intended to dissuade foreign governments from imposing inequitable taxes on U.S. enterprises. However, it is posited by Michael Bolotin of Debevoise that this regulation might inadvertently result in a tax burden shift primarily onto U.S. borrowers rather than the targeted non-U.S. lenders. This potential outcome emphasizes the importance of Congressional intervention to limit the section’s applicability to prevent unintended financial consequences for American borrowers. For further details, the analysis is available on Law360.