Section 899 ditched but companies face tax uncertainties

While Australian investors breathed a resounding sigh of relief when US President Donald Trump binned section 899 of the One Big Beautiful Bill Act (OBBBA), local multinationals, however, were lumped with grave uncertainties surrounding the global Pillar 2 tax regime. Karren Vergara reports.

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Australian investors, particularly superannuation funds, lunged into cartwheels upon the exclusion of section 899 in the OBBBA, which was cemented into law on July 4.

SW Accountants & Advisors associate director of tax Antony Cheung said the removal of section 899 was welcomed by Australian groups that invest and conduct business in the US.

"This is particularly relevant for superannuation funds taxed at 15% in Australia, where the additional US tax could not be credited and would have directly and immediately impacted investment returns," he said.

Section 899 would have affected long-term investments and confidence in investing in the US because of all the uncertainty, Cheung told Financial Standard.