International Tax Overhaul: 3 Key Changes That Demand Attention

Article | December 05, 2025

Please see the latest on the OBBB changes from Isler CPA

The global tax landscape is shifting fast—and with the Overhaul of Basic Benefits Bill (OBBB) now in effect, U.S. businesses with international operations face new rules, new risks, and new opportunities. Here are the top three changes that could impact your cross-border strategy: 

1. Transfer Pricing Under the Microscope

The IRS’s win in the landmark Facebook, Inc. v. Commissioner case signals a more aggressive stance on transfer pricing—especially when intangible assets are involved. The court ruled that Facebook undervalued its cost-sharing agreement with its Irish subsidiary, resulting in higher U.S. tax liabilities.

What this means for you: If your business shares IP or services across borders, now is the time to review your transfer pricing agreements. The IRS is watching—and the “best method” matters more than ever.

2. GILTI Becomes NCTI—with New Rules

Global Intangible Low-Taxed Income (GILTI) has been rebranded as Net CFC Tested Income (NCTI), and the calculation has been simplified. But there’s a catch: the deduction rate drops from 50% to 40%, and new rules limit which expenses can be used to offset foreign income.

What this means for you: U.S. shareholders of controlled foreign corporations (CFCs) may see higher U.S. tax liabilities. Modeling the impact of these changes is critical before 2026.

3. FDII Redefined as FDDEI—With Broader Access

The Foreign-Derived Intangible Income (FDII) deduction is now called Foreign Derived Deduction Eligible Income (FDDEI). The new rules simplify the calculation and remove barriers that previously excluded some domestic corporations from claiming the deduction.

What this means for you: More companies may now qualify for this valuable deduction on foreign sales. If you’ve been left out in the past, it’s time to revisit your eligibility.

Let’s Talk Global Strategy

These changes are complex—but they also create opportunities for proactive businesses. Whether you’re exporting goods, managing foreign subsidiaries, or navigating transfer pricing, we’re here to help you adapt with confidence.  For more information, click the following link to read the full article: Transformational Shifts in International Taxation.

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