Section 899 proposed raising withholding rates and the branch profits tax every year for residents of countries that apply "unfair" taxes to US companies (including digital services taxes and the OECD's Pillar Two rules), by up to 5 percentage points a year with a 20-point cap. After Treasury Secretary Scott Bessent announced a G7 understanding to exempt US companies from Pillar Two, Senator Crapo and Representative Smith removed the provision, and the One Big Beautiful Bill Act passed without it.
That was not the end of it: in December 2025 and in 2026, trade publications reported that Ways & Means Republicans were discussing reviving Section 899 in a second reconciliation package or a year-end bill if the OECD deal stalled.
Why it matters to non-residents
Owners of US LLCs and C-Corps from countries that would have been listed avoided a potential 5–20 point rise in withholding. The risk isn't zero, so if you plan dividend or royalty payments for 2027, watch the tax bills of late 2026. This is not tax advice; ask a specialist about your specific structure.
Not legal or tax advice. Rules change, so check primary sources or ask a qualified advisor before you decide.
