Trump’s Section 899: Global Investment Impact
- The One Big Gorgeous Bill (OBBB), having cleared the House, now faces examination in the Senate.
- Section 899, sometimes called the "revenge bill," aims to tax passive income, such as dividends, derived from foreign ownership of U.S.
- The Treasury Department would designate countries subject to these taxes by including them on a list of Discriminatory Foreign Countries (DFC).Governments, individuals, corporations, sovereign wealth funds, and foreign...
Section 899, a tax provision from the Trump era, is back in the spotlight as the senate reviews the One Big Gorgeous Bill (OBBB). This ”revenge bill” targets countries with what are considered “unfair foreign taxes,” perhaps impacting governments, individuals, and corporations with a significant financial bite: a tax rate that could balloon by 5% annually, up to a 20% maximum increase. This legislation could reshape international tax policy,but if the OBBB is passed before october 2025,it’ll go into effect on January 1,2026. News Directory 3 is closely following the potential effects on digital service taxes and minimum corporate taxes.Discover what’s next in the Senate’s deliberations.
Trump-Era Tax revenge bill Resurfaces Amid Senate Scrutiny
Updated June 3, 2025
The One Big Gorgeous Bill (OBBB), having cleared the House, now faces examination in the Senate. While much attention has focused on the bill’s potential to increase government spending, Section 899 has emerged as a key point of interest.
Section 899, sometimes called the “revenge bill,” aims to tax passive income, such as dividends, derived from foreign ownership of U.S. assets. this applies to countries deemed to have enacted ”unfair foreign taxes” on the U.S., potentially including digital service taxes or minimum corporate taxes.
The Treasury Department would designate countries subject to these taxes by including them on a list of Discriminatory Foreign Countries (DFC).Governments, individuals, corporations, sovereign wealth funds, and foreign central banks could all be impacted.
The tax rate under Section 899 would generally increase existing U.S. tax rates on applicable entities by 5% in the first year after enactment. It would then increase by an additional 5% each subsequent year, capped at 20% above the statutory rate. Crucially, Section 899 requires an existing applicable tax rate to build upon.
If the OBBB is enacted before october 2025, Section 899 would take effect Jan. 1, 2026.Although the current version wouldn’t apply to coupons earned on Treasury securities, it signals a potential shift in U.S. policy toward foreign investment.
What’s next
The Senate’s decision on the OBBB will determine the fate of Section 899 and its potential impact on international tax policy and financial markets.