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Industry groups from real estate, finance, and multinational companies are pushing for a retaliatory tax on foreign investors in the US to be reduced or taken out of the Republican tax bill known as Section 899. According to them, it is a threat to their businesses, the economy, and markets as a whole. Section 899 of the proposed tax applies a progressive tax burden of up to 20% on the US income of foreign companies. This is meant to punish countries that tax things like digital services in ways the US considers unfair.  The measure targets most EU countries, the UK, Australia, Canada, and others around the world would be affected, according to law firm Davis Polk.  However, the asset management industry is concerned about outflows. The new levy is feared to increase taxes from rents and real estate investment trusts, gains from property sales, and securitized products.  David McCarthy, managing director at the CRE Finance Council, a nonpartisan trade group, said that it could depress the value of real estate. This is if there is a shortage of money to finance property purchases. In addition, a spokesperson for the Investment Company Institute said, “We encourage the Senate to make this provision more targeted to respond to unfair foreign taxes and other concerning measures rather than disincentivizing beneficial foreign investment in the US.”   200 foreign-owned companies face uncertain futures The president of the Global Business Alliance, Jonathan Samford, told the FT that this week, members of Congress would meet with representatives from about 70 companies. Section 899 would be a central topic of their talks. The fear of higher taxes has made the almost 200 foreign-owned companies in the US nervous. These companies include Shell, Toyota, SAP, and LVMH. Many fear that the 8.4 million jobs they create in the…

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Filed under: News - @ June 9, 2025 2:29 pm