Navigating the impact of Section 899 on Irish firms

Several major Irish-headquartered companies with significant US operations may be insulated from proposed new US tax measures, while others could face increased complexity and cost if the legislation is enacted.

The One Big Beautiful Bill Act (OBBBA), recently passed by the US House of Representatives and under consideration by the Senate, includes a controversial provision known as Section 899. This clause proposes a gradual increase in US tax rates – up to 20 percentage points – for companies, individuals and investors from jurisdictions deemed to impose “unfair foreign taxes” on US businesses.

These “unfair” taxes include the 15% global minimum effective tax, implemented by Ireland and other EU countries in 2023 under the OECD’s international tax reform agreement.

However, foreign companies that are majority-owned by US investors appear to be exempt under the current draft legislation. Based on current shareholder data, companies such as CRH, Flutter Entertainment and Smurfit Westrock – all of which have substantial US footprints – would likely fall outside the scope of the tax due to their predominantly US-based ownership.

Other Irish multinationals with US operations, including Kingspan and Kerry Group, may be more exposed, depending on how their investor base evolves over time. Ownership structures can shift and companies may dip in and out of scope depending on shareholder changes.

Under Section 899, the additional tax would be phased in at a rate of 5 percentage points per year, reaching a potential maximum increase of 20 points above standard US rates. This would apply to areas such as withholding taxes on dividends, royalties and interest, and income tax on US trade or business income.

Importantly, capital gains and interest on US government bonds are excluded from the proposed surcharge, offering some relief to certain classes of investors.

“If the provisions are enacted and commenced, it will suddenly become more expensive for an Irish company to have a presence in the US,” said Cormac Kelleher, Forvis Mazars International Tax Partner. “It could also cause Irish companies planning to set up a business in the US to think twice – and maybe to look at alternative markets. Still, others might just have to take the tax hit, if the US is a very important market strategically for them.”

The proposed legislation remains under debate, with the Senate expected to vote by 4 July. The current Senate version includes a delay in enforcement until 2027, but the core provisions of Section 899 remain intact.

Industry groups, including the Global Business Alliance, have warned that the measure could have significant economic consequences, including the loss of up to 700,000 US jobs and a $100 billion annual hit to US GDP.

For Irish companies with transatlantic operations or ambitions, this development underscores the need to monitor legislative updates closely and review cross-border structures in light of potential tax impacts.

A version of this article first appeared in the Irish Times on Saturday, 21 June 2025.