When US President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law in July, he set in stone tax provisions that will shape the US multinational corporate landscape for years to come.

The international provisions in President Trump’s budget and tax plan are an ‘America First’ policy that favours US-based multinationals and diverges from an OECD global tax fairness framework.

Trump and his allies have promoted the tax and budget bill as a boon to working families. It eliminates taxes on most service tips, boosts child credits and introduces new investment accounts for children. It permanently extends the 2017 tax cuts passed by Congress during President Trump’s first term, which had been scheduled to expire later in 2025.

President Trump’s tax cuts are expected to reduce US government revenues by about $4.5tn over the next ten years, according to estimates by official scorekeepers at the Congressional Budget Office and the Joint Committee on Taxation within Congress. Trump’s plan partially offsets those losses with $1.1tn in proposed cuts to welfare spending on healthcare, food aid and student loan programmes. 

Combined, President Trump’s tax and spending cuts will add $3.4tn more to US government budget deficits over the next ten years, meaning the country’s Treasury will have to borrow more from investors.

Joseph Sullivan, an officer of the IBA Taxes Committee, says the OBBBA’s most enduring impact lies in its corporate and international tax architecture. The US has solidified its international tax regime in two key respects, he explains. ‘One, to provide for current taxation of all subsidiaries, which on a standalone basis makes it relatively unattractive to be a US multinational’, he says, because such a cost is one ‘you might not bear in some other countries.’ 

Secondly, the OBBBA has extended the foreign-derived intangible income (FDII) regime, ‘which in very broad terms is an export incentive,’ explains Sullivan. FDII offers a preferential tax rate for income from exporting goods and services, or licensing intellectual property abroad. Under the new law, the FDII deduction is set at 33.34 per cent, producing an effective tax rate of roughly 14 per cent from 2026, according to the accounting company Ernst & Young. The OBBBA applies a similar effective rate to global intangible low-taxed income (GILTI), maintaining parallel treatment of foreign and export income.

The retention of low rates and more generous foreign tax credit rules help keep the US regime competitive for multinational companies with global operations and significant overseas profits, says Sullivan, who’s a lawyer at Covington & Burling in Washington, DC. ‘It provides a reduced rate of tax to people who sell goods or services to foreigners, basically. And so that piece of the Act makes it good to be a US multinational, because you are able to take advantage of that deduction. So, it solidified that regime.’ Sullivan adds that some companies benefit from those rules and ‘come out ahead’, while others don’t. 

Importantly, the new law codifies the unilateral approach taken by the US to corporate and international tax, which diverges from the global minimum tax framework being developed by the OECD. Most other major economies are moving toward a 15 per cent minimum tax to discourage profit-shifting to tax havens. ‘One interesting additional flavour here is that the US had been negotiating with the OECD on the implementation of a 15 per cent worldwide, global minimum tax. What the US did in making its 2017 [tax cuts] law permanent and not adopting the OECD global minimum tax is very interesting, because it basically means we will continue to do it our way,’ Sullivan says. 

‘And that has been accompanied by a number of other interesting developments that have caused the US to be in some conflicts with countries adopting the global minimum tax. That is leading to a bunch of negotiations on the world stage as to how that tax should proceed, how it should affect US companies,’ adds Sullivan.

While the new US law is technically compliant with OECD standards, the divergence risks prolonged disputes over double taxation, foreign tax credits and retaliatory measures, particularly as more nations implement the OECD’s ‘Pillar Two’ rules that the US won’t mirror, Sullivan says.

In June, US Treasury Secretary Scott Bessent negotiated a compromise with delegates from several major economies during the G7 Summit in Canada. They agreed a ‘side-by-side’ system to exempt US companies from OECD rules. In exchange, the Trump administration withdrew a ‘revenge tax’ provision from the OBBBA that would have targeted non-US companies.

OECD Secretary-General Mathias Cormann welcomed the G7 agreement as ‘an important milestone’ and pledged that his organisation would continue to negotiate toward ‘the original aim of establishing multilaterally agreed limitations on corporate tax competition and also safeguards the tax bases of governments.’

Additionally, the OBBBA allows businesses to deduct the full cost of assets acquired beginning in 2025, instead of depreciating them over multiple years. It liberalises business interest deductions and expensing for domestic research and development investments.

The Act terminates and phases out a wide range of green energy tax credits enacted under former President Joe Biden.

Opponents have argued that President Trump’s rollbacks of health and social safety net programmes will disproportionately harm children, the elderly, low-income families and people with disabilities. Most of the tax cuts will accrue to wealthy individuals and corporations while average working families will see little gain, opponents of the OBBBA claim. The additional deficits will push up US interest rates, they say.

‘Budgets reflect the policy. [The OBBBA] cuts funding for certain entities that the administration views as not consistent with its policy priorities,’ says Steven Richman, Chair of the IBA Bar Issues Commission.

Supporters of the OBBBA counter that investment incentives and a lower tax burden on overseas profits will spur growth, expand the tax base and partially offset the projected revenue losses over time.

The overall fiscal impact will probably be stimulative for the US economy. ‘It spends more than it raises, and that – by any Keynesian economist’s definition of how tax works – will be stimulative,’ Sullivan says.

‘Overall, [the] OBBBA will modestly boost the economy in the short run, offsetting a small portion of the revenue cost. But the Act will worsen the nation’s already daunting long-term budgetary imbalance,’ wrote Benjamin Page, a senior fellow at think tank the Urban-Brookings Tax Policy Center.

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Digital assets such as cryptocurrencies and NFTs emerged as disruptors, designed to challenge traditional financial systems and sidestep conventional regulation. But, as these technologies have developed, so too have legal frameworks. At the end of 2024, MiCA (Markets in Crypto-Assets Regulation) entered into force in the EU, and in the US the GENIUS Act, which seeks to establish the first comprehensive federal framework for the issuance, regulation and oversight of payment stablecoins, was signed into law with bipartisan support in July 2025.

In this podcast, Luis Urrutia, Deputy General Counsel, International Monetary Fund; Lee Pascoe, Special Counsel, Norton Rose Fulbright; Drew Hinkes, digital assets partner at Winston & Strawn; and Jon Frost, Head of Innovation and the Digital Economy unit at the Bank for International Settlements – who spoke on a panel at the IBA’s Annual Conference in Mexico – explore the effect regulation can have on digital assets.

Listen to the podcast here.

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Guidelines on the use of generative AI in mediation

Access the guidelines here.

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The impact of pro bono: interview series

The IBA Pro Bono Committee is conducting an interview series with people with experience of pro bono work, whether as a lawyer, client, clearinghouse or other organisation representative. The interviews capture the impact pro bono work has had on their lives and underline that measuring pro bono solely by hours ignores the wide range of positive outcomes of the pro bono work that lawyers do to support individuals and organisations around the world.

At the time of writing, the first three interviews are available online, featuring:

• Hunter Carter, co-leader of AFS International and a specialist in international arbitration and US commercial law. He is a dedicated pro bono advocate and has addressed human rights issues before the Colombian Senate and Inter-American Commission.
• Anis, an Afghan national who received pro bono advice on the Afghan Special Immigration Visa, which allowed him to obtain permanent residence status in the US.
• Ignacio Obando, co-coordinator of Red Pro Bono de Las Americas.

Many lawyers involved in pro bono work want to think more creatively and effectively about the real impact of their endeavours on people and communities. The project’s creators hope that the interviews will inspire continued discussions on how to better understand and measure the positive impact of pro bono efforts, with the goal of helping all involved to see impact in a wider, more meaningful way.

Read the interview series here.

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Inspirational Legal Women podcast series concludes with final two episodes

The IBA Legal Policy & Research Unit (LPRU) Inspirational Legal Women podcast series, which began in March this year, features IBA members from around the world discussing their careers and personal stories. Guests share their thoughts and experiences about what it means to be a woman in the legal profession and how they’ve navigated different types of workplaces and challenges over their careers. The series has reached a conclusion with its ninth and tenth episodes, featuring conversations with Adeola Sunmola and Carli Schickerling, respectively.

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Dispute Resolution International journal explores landmark Singapore ruling and more

The latest edition of Dispute Resolution International (DRI) was published in July. The journal of the IBA Dispute Resolution Section, DRI provides in-depth discussion of current developments and topical issues in areas including litigation, arbitration, mediation and other areas of alternative dispute resolution, as well as negligence and damages.

Two articles in the latest edition – by Jennifer Lim and Eric Ng, respectively – consider the case Republic of India v Deutsche Telekom AG, which clarified the application of transnational issue estoppel in international arbitration under Singapore law.

The latest edition also includes analysis – by Gary Gao and Meg Utterback – of three primary types of mediation in China. The article examines how, as Chinese parties continue to go global, mediation is emerging as an attractive option for efficient and cost-effective dispute resolution.

The issue further contains a piece by Mariam Gotsiridze assessing expedited arbitration procedures as a technique to address what the author reports is a trend of increased user dissatisfaction with time and costs in arbitration.

The journal is available to all Dispute Resolution Section members via the IBA website and can also be purchased by non-members as a yearly subscription or on an individual issue basis.

Learn more about the journal and view the latest edition here.

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IBA Healthcare and Life Sciences Law Committee publishes guide on financing and reimbursement

with each based on survey responses. In 2024, the Committee examined requirements for promoting pharmaceutical and medical devices. In 2023, the Committee addressed questions related to telemedicine.

Access the guide here.

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In May, the UK regulator Ofwat fined Thames Water, the country’s largest water company,  £123m for failures resulting in significant sewage spills and inappropriate dividend payments to shareholders. The fine is the biggest penalty ever imposed by the regulator. In response, Thames Water said it takes its responsibility towards the environment ‘very seriously’, adding that it continues to search for investment to help relieve its £20bn debt.

The UK’s water sector faces a severe crisis characterised by financial instability, environmental harms and lack of public trust. This crisis stems from the long-term consequences of privatisation, inadequate regulatory oversight and underinvestment in infrastructure. The total debt of the UK’s 12 water companies stands at £65bn.

‘The water sector has been poorly regulated for decades,’ says Jo Maugham, Director of the Good Law Project, which has been involved in various legal challenges against water companies for their sewage dumping practices. ‘It has been poorly regulated primarily by allowing water companies to over extract water from aquifers and reservoirs but also cash from operating entities within the water companies, and they’ve been allowed to underinvest in water infrastructure,’ he says.

Since July, over 81 criminal investigations have been launched into sewage dumping by water companies and UK bathing water quality is the fifth worst in Europe. Many experts believe the solution is to nationalise the water industry. Ewan McGaughey, a professor of law at Kings College London, argues that the government could use a process called special administration to take over Thames Water for a minimal cost. Under the 1991 Water Industry Act the process can be triggered when a company is heavily indebted or seriously underperforming. He says that public ownership is the best way to ensure ‘lower bills, higher water quality and investment in infrastructure’.

Apart from concerns over the poor performance of water companies, the Environment Agency has warned that the UK faces a five-billion-litre water shortage by 2055 because of pressures caused by climate change, emerging technologies and an aging population. 

Susie Alegre, a human rights barrister at Garden Court Chambers in London, who specialises in technology and human rights, says that the new data centres required for the government’s AI growth plans, which require large amounts of water to prevent them from overheating, will require a sustainable approach. ‘When you look at the scale of energy and water use in generative AI, compared to, for example, a straight Google search, we’re talking about 10 or possibly even more times,’ she says. Experts have predicted a typical data centre can use between 11 million and 19 million litres of water per day, the same as a town of 30,000 to 50,000 people.

Environmental organisations have raised concerns about the strain such giant data centres would put on already stretched supplies of drinking water with some of the areas where the data centres are set to be built being particularly vulnerable to water shortages. In April, non-profit Source Material published an investigation that found some of the biggest tech companies are operating data centres that use vast amounts of water in some of the world’s driest areas and are in the process of building many more.

Internationally, the water sector faces multifaceted issues including water scarcity, pollution, aging infrastructure and the impacts of the climate crisis. The World Health Organization estimates that two billion people lack access to safely managed drinking water and 3.6 billion people lack access to safely managed sanitation. ‘We have droughts all over the world leading to a reduction in rain levels and we also have rivers and lakes being contaminated, limiting the availability of water,’ says Kleber Luiz Zanchim, Co-Chair of the IBA’s Water Law Committee and a partner at SABZ Advogados in Brazil. ‘This requires from a regulatory perspective different actions to prevent new contaminations and to help areas that are sometimes far away from the water source’.

Zanchim says that the main challenges relating to the regulation of the water sector include ensuring the technology developed for water recycling is ‘widespread and at a fair cost’ and defining the water quality standards for human consumption, agriculture and other uses. He says PFAS – a group of chemicals used in many everyday consumer products – ‘is a huge discussion because it gets into the rivers and water resources and we still don’t have a clear perspective on the impacts on human health’.

The EU introduced a Drinking Water Directive, which is expected to come into effect in 2026, which limits the level of PFAS allowed in drinking water. Several countries, including the US, Denmark, Sweden and Germany already have stricter measures for PFAS levels. Research has shown that exposure to PFAS can lead to various environmental harms and health problems including an increased risk of certain cancers, suppression of the immune system and liver damage.

In South America, Zanchim says, cross-border agreements to regulate water quality and environmental impacts are not easy to reach because the countries in the region have other major issues they need to prioritise. ‘We don’t have the very well-structured regulation among different countries that we should have,’ he says, ‘because these countries have so many challenges – economic, social and so on – that make this is a secondary issue.’ 

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