Trump’s ‘One Big Beautiful Bill’ and what it means for Ireland

US President Donald Trump’s “One Big Beautiful Bill”, currently advancing through Congress, carries significant implications for global tax policy and foreign direct investment, particularly for countries like Ireland that have long attracted multinational manufacturing operations.

One of the headline measures in the bill is a new accelerated tax deduction for capital expenditure on manufacturing facilities. This provision allows companies to write off the full cost of a new factory in the US in the first year – a stark contrast to Ireland’s current 25-year capital allowances regime.

From a policy perspective, this is a substantial shift. Designed to encourage domestic manufacturing, the incentive applies retrospectively to qualifying builds from 19 January – the date of President Trump’s inauguration. For large-scale facilities, the tax impact is potentially enormous.

As we assess the implications from an Irish standpoint, it raises important strategic questions. If this measure proves effective in reshoring investment to the US, the Irish Government may need to consider whether our own capital allowances regime remains competitive.

While matching the US’s approach like-for-like may not be feasible or necessary, there is scope to think creatively. One option could be to introduce a more targeted incentive for the SME sector, perhaps allowing capital costs to be deducted over a shorter period – say, 10 years. Such a move would help balance the long-standing tax advantages afforded to large multinationals while bolstering indigenous enterprise.

That said, Ireland’s value proposition has always gone well beyond tax. In today’s environment, we should be asking: can we compete on quality rather than just cost?

Pharmaceutical plants in Ireland, for instance, are known for exceptionally low error rates and high production standards. That’s a compelling proposition in industries where consistency and reliability are paramount. Less wastage means less obsolescence and that’s worth something in global supply chain decisions.

Another notable development in the bill is the removal of Section 899 – a punitive provision initially included as a retaliatory measure against jurisdictions perceived to benefit from global minimum tax rules under Pillar 2. Its exclusion from the final draft of the bill is welcome. Had it been retained, it would have made US investment markedly more expensive for firms operating in Ireland and other low-tax jurisdictions.

As international tax policy continues to evolve, the balance between competitiveness, compliance and long-term strategy remains delicate. At Forvis Mazars, we’ll be closely monitoring these developments to help clients navigate the road ahead.

This is an edited version of an article that appeared in the Irish Independent on Friday, 5 July 2025, international tax partner Cormac Kelleher talks to John Burns about how tax rules here may need changes to counteract new US tax incentives.