Decoding the OBBBA

The United States has entered a new tax era with the enactment of the One, Big, Beautiful Bill Act of 2025 (OBBBA). Beyond its eye-catching name, this legislation makes sweeping changes to the federal tax code, reshaping incentives and compliance for both domestic and international businesses.

Here’s a sector-specific look at what matters most—particularly for companies with cross-border or UK–US exposure.

Construction: Liquidity and Investment on the Rise

1. 100% bonus depreciation is now permanent for qualified property placed in service after 19 January 2025, unlocking immediate expensing.

2. The §163(j) business interest limit is back to an EBITDA basis (30%), expanding deductibility for capital-heavy projects.

3. Percentage-of-completion rules have been relaxed for residential contractors, broadening eligibility and smoothing taxable income.

Impact: Contractors gain improved cash flow, better financing deductibility, and more flexibility in revenue recognition.

Real Estate: A Window of Opportunity

1. Bonus depreciation and increased §179 expensing limits supercharge deductions for improvements and equipment.

2. The 20% QBI deduction for pass-throughs is now permanent.

3. The popular §179D energy-efficiency deduction is being phased out for projects starting after 30 June 2026.

Impact: Owners and developers should front-load energy upgrades before the deadline, while maximizing new expensing opportunities.

Maritime: Indirect Pressures, Direct Consequences

1. The OBBBA doesn’t legislate ship taxes directly, but its context matters:

2. With the EU ETS now covering shipping and IMO emissions rules tightening, tax-linked carbon costs are rising.

3. Green financing is becoming the norm, with lenders favoring low-emission vessels.

The U.S. is diverging from the OECD global tax deal, adding complexity for cross-border operators.

Impact: Operators must plan financing and charter terms around emissions costs and investor expectations.

International Tax: Broader Base, Higher Stakes

1. GILTI has become Net CFC Tested Income (NCTI) with a reduced 40% deduction, raising the effective U.S. tax rate to ~12.6%.

2. The QBAI exemption is eliminated, broadening the tax base.

3. FDII is replaced by Foreign-Derived Deduction Eligible Income (FDDEI), with new mechanics and rates.

4. Foreign tax credit rules are relaxed, now allowing up to 90% credit on deemed-paid taxes.

Impact: U.S. multinationals face a higher foreign-income burden but gain more credit relief—pushing many to rethink repatriation, IP ownership, and financing structures.

Final Thoughts

The OBBBA is more than a headline-grabber; it’s a deep recalibration of U.S. tax policy. For construction and real estate, it boosts liquidity and deductions. For maritime, it underscores global pressures on carbon and financing. For cross-border groups, it reshapes the international tax equation.

In every sector, the key takeaway is this: strategic timing and proactive planning are now indispensable.