The One Big Beautiful Bill: What Latin American Businesses Need to Know

Summary: The One Big Beautiful Bill (OBBB) introduces major changes to U.S. tax law that directly affect Latin American companies with operations, clients, and investments in the States. The bill’s provisions will impact a range of tax planning strategies, from reduced deductions under NCTI and FDDEI to new compliance and reporting requirements. In this article, Aprio outlines the strategic considerations Latin American businesses need to know to stay compliant and competitive.

The recently passed One Big Beautiful Bill (OBBB) is the most sweeping update to U.S. tax policy in years. While its impact is broad, there are several important issues that directly impact Latin American companies with U.S. operations, clients, and investments. At the same time, the OBBB introduces both opportunities and challenges for businesses operating across borders, including changes to international tax rules, deductions, and reporting requirements.

If you lead a Latin American company that is expanding into or already doing business in the U.S., it’s essential for you to have a solid understanding of the OBBB provisions to avoid surprises, optimize your tax outcomes, and align your business strategies to this new regulatory environment.

Understanding the One Big Beautiful Bill (OBBB)

The OBBB reshapes multiple areas of U.S. tax law, with some of the most notable changes including:

• Renaming of key regimes: The OBBB has renamed the Global Intangible Low-Taxed Income (GILTI) rules to the Net Controlled Foreign Corporation Taxable Income (NCTI) rules; furthermore, the Foreign-Derived Intangible Income (FDII) provisions are now known as the Foreign-Derived Deduction Eligible Income (FDDEI) regime. While the new names may seem purely cosmetic at first glance, the rules behind them are shifting in ways that Latin American businesses cannot ignore.
• Deduction and exclusion changes: The OBBB reduces reduction rates for NCTI and FDDEI and it eliminates certain exclusions, like tangible property under NCTI.
• Foreign tax credit reforms: The new legislation did not eliminate foreign tax credit limitations, but it did relax them slightly, capping the credit at 90% of deemed-paid taxes with stricter sourcing requirements.
• Domestic investment incentives: The bill also introduces adjustments to Section 179 expensing and bonus depreciation rules, which will likely impact capital planning for Latin American businesses.
• Compliance alignment: New requirements under the OBBB mandate consistency in tax years between U.S. parents and controlled foreign corporations (CFCs), alongside refined ownership attribution rules.

Tax implications for Latin American companies under OBBB

If you lead a Latin American company and are doing business in the U.S., the OBBB provisions will bring more substantial changes to how your cross-border income may be taxed, credited, and reported to the IRS. Please note that most international tax provisions under the OBBB apply to taxable years beginning after December 31, 2025, meaning the first real impact will be felt by taxpayers in 2026 returns filed in 2027.

Section 179 and bonus depreciation

Latin American-owned businesses investing in U.S. equipment or property should carefully review updated Section 179 expensing limits and bonus depreciation rules. The changes may alter the timing of their deductions and therefore could impact after-tax cash flow. If you own a Latin American company in a capital-intensive industry like manufacturing or logistics, these changes will be especially relevant to you when you budget for U.S. expansion.

International tax considerations

Aside from the Section 179 and bonus depreciation rules, there are several other OBBB changes that directly impact businesses operating across borders:

• Repatriation and withholding: Revisions to cross-border tax rules under the OBBB may impact how businesses repatriate profits from foreign subsidiaries. Profit repatriation includes transferring earnings or financial assets, such as currency conversion and fund remittance, from a foreign entity back to its U.S. headquarters. Businesses should analyze these changes since new limitations on foreign tax credits and deduction allocations could affect overall U.S. tax liability from repatriated funds.
• Remittance transfer tax: Starting January 1, 2026, the government will implement a 1% excise tax on certain outbound remittance transfers. The tax generally applies to transfers conducted with physical payment methods, like cash, money orders, or cashier’s checks, but not to intra-corporate transactions or bank account withdrawals subject to the Bank Secrecy Act (BSA). Organizations should review their payment procedures and assess their exposure, keeping in mind that transfers funded by U.S. debit or credit cards are exempt, while prepaid card reloads and similar transfers are taxable.
• Transfer pricing: While the OBBB doesn’t overhaul transfer pricing rules, its ripple effects (particularly around sourcing and credit allocation) may influence your organizational and supply chain structures.
• Compliance obligations: With the OBBB’s mandatory alignment of CFCs and U.S. tax years, all companies with Latin American headquarters should prepare for increased administrative coordination and potential system updates. It’s important to consult with your international tax advisor to coordinate and make sure you are positioned to comply with the new regulations.

Reporting requirements

The OBBB introduces additional reporting requirements that will raise the bar for corporate tax transparency. As a result, your Latin American business may face new reporting burdens, especially around ownership attribution, income classification, and foreign tax credit calculations. Once again, it’s essential to connect with your international tax advisory team to gain a full understanding of the new requirements and make sure you’re prepared to meet them.

NCTI and FDDEI: The new faces of GILTI and FDII

As we mentioned above, the OBBB provisions include the renaming of GILTI and FDII to NCTI and FDDEI, but the change is much more than just a rebranding exercise. It also brings a host of new implications for Latin American businesses. Below, we have summarized the most notable updates:

• NCTI (formerly GILTI): The OBBB removes the tangible property exclusion, which means that companies with significant, physical U.S. operations (think manufacturers, distributors, and hospitality businesses) may face higher effective tax rates. The OBBB’s deduction rate cut from 50% to 40% compounds this effect as well.
• FDDEI (formerly FDII): Under the new legislation, the deduction for foreign-derived income is now less generous, reduced to 33.34%. More importantly, the OBBB now excludes gains from the sale of intangible or depreciable property and disallows interest and R&D deductions. We predict this will be a significant shift for technology and IP-heavy Latin American companies selling products to the U.S.

Fortunately, there are several planning strategies Latin American companies can deploy to mitigate the impact of the new NCTI and FDDEI provisions. These may include:

• Re-evaluating global IP ownership structures.
• Leveraging cost-sharing arrangements or licensing strategies.
• Exploring tax-efficient financing structures in response to lost interest deductions.

Connect with your tax advisory team sooner rather than later to evaluate these strategies and decide whether they make sense for your unique situation.

Operational and strategic impact of the OBBB

While the OBBB is a tax bill first and foremost, it would be remiss for us to ignore the indirect effects it will have on tariffs, sourcing, and supply chains. If your company is importing goods from Latin America into the U.S., you should reassess your cost models and make sure your transfer pricing strategy aligns with the tighter sourcing rules tied to foreign tax credits.

Industry-specific considerations

• Manufacturing & Distribution: If your company operates in this sector, you may be impacted by tangible property rule changes under NCTI, as well as depreciation updates.
• Technology: If you own or lead a tech company, you could be affected by the FDDEI’s exclusion of IP-related sales and R&D disallowances.
• Restaurant, Franchise & Hospitality: Your business may see increased exposure to U.S. taxation if you are operating physical properties stateside.

While complying with any new regulation comes with its own set of challenges, the OBBB could also create opportunities for Latin American companies. For instance, U.S. incentives for domestic investment may benefit Latin American companies establishing operations or expanding capacity in the U.S. market. Those businesses that adapt quickly to the OBBB changes could gain a competitive edge in pricing, tax efficiency, and market positioning.

Risk management and strategic planning for the OBBB

While planning for OBBB compliance, Latin American businesses must also be prepared to navigate potentially higher effective tax burdens. There are several potential pitfalls on the horizon for companies that underestimate the material impact of deduction reductions, the loss of certain exclusions in NCTI/FDDEI calculations or fail to align their reporting systems across jurisdictions.

Fortunately, you can protect your Latin American business from these costly risks with some proactive strategic planning. Before continuing to do business as usual in the U.S., be sure to:

• Conduct tax modeling to forecast the net effect of the OBBB provisions on your bottom line.
• Reassess your supply chain structures and intercompany pricing.
• Review your capital investment timing to optimize your use of Section 179 and bonus depreciation.
• Strengthen your compliance processes to handle new reporting and alignment requirements.

As you embark on these to-do list items, it’s important to make sure your tax advisors possess ample cross-border experience. This will help put your company in the best possible position to comply with the OBBB and proactively identify opportunities to optimize tax outcomes and mitigate risks.

Final thoughts

There’s no question that the OBBB will significantly alter the tax landscape for international businesses. But for Latin American companies engaged with the U.S., the changes are material, bringing operational and legal ramifications that extend far beyond taxes.

As you look forward to the future of your Latin American business, it’s important to plan proactively to avoid pitfalls and position your organization for growth under the new rules. Now is the time to re-evaluate your structures, refresh your strategic tax plan, and make sure your business is ready for what’s next.