With the market taking a closer look at the “One Big Beautiful Bill Act” after it was narrowly passed by the US House of Representatives on May 22, a clause called Section 899 has caught the attention of investors worldwide by including a new set of “retaliatory” taxes on inbound foreign investment.

As the bill now awaits Senate consideration, there are growing concerns that some of the most sweeping changes to the tax treatment of foreign capital in the US in decades could lead to a sharp reduction in foreign investment in American assets.

In this explainer, the Post breaks down some key points in Section 899, including which countries are targeted, and its potential impact on US assets.

What is Section 899?

Titled “Enforcement of remedies against unfair foreign taxes”, Section 899 is a new provision that targets investments by countries that have “discriminatory and extraterritorial taxes” on US businesses.

Taxes that have been named include the digital-services taxes, diverted-profits tax, and undertaxed-profits rules.

Governments, corporations, private foundations or individuals from these countries will be charged an additional 5 percentage points of withholding tax rate each year on their US income, potentially taking the rate up to 20 per cent, until the “unfair tax” is removed.

Echoing the spirit of the “Mar-a-Lago Accord”, Section 899 reflects Washington’s increasing readiness to leverage US dominance in the global capital market to confront what it views as the unfair treatment of American businesses abroad.

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