Tax Bytes: Week of June 9, 2025

OECD releases a new consolidated text of the CRS

On June 2, 2025, the OECD released a new consolidated text of the Common Reporting Standard (CRS). This updated version combines the original text of the CRS from 2014 with amendments released in October 2022. The purpose of the CRS was to set out standards for jurisdictions to obtain information from financial institutions and automatically exchange the information with other jurisdictions annually. The 2022 amendments to the CRS expanded the scope of reporting requirements to include certain digital financial products, such as digital currencies. These amendments were released alongside the OECD’s Crypto-Asset Reporting Framework (CARF), and the amendments also included provisions to limit duplicative reporting of digital financial products under CARF and the CRS. In addition, the 2022 amendments included more detailed reporting requirements and strengthening of due diligence procedures, among other items. 

Beyond the OBBB: Unpacking the international tax provisions in S. 1605

On May 6, 2025, Senate Finance Committee member Thom Tillis introduced the International Competition for American Jobs Act (S. 1605), which includes, among other items, amendments to various international tax provisions. Although there is some overlap with the budget reconciliation bill passed by the House of Representatives, titled the “One Big Beautiful Bill” Act (OBBB), and under consideration now in the Senate, S. 1605 includes several changes to international tax provisions of the Internal Revenue Code that are not in the OBBB.¹

Among other items, S. 1605 would:

• Extend the look-thru rule for controlled foreign corporations (CFCs) under section 954(c)(6), which is due to expire for tax years beginning after December 31, 2025; 

• Reduce the number of foreign tax credit baskets under section 904(d)(1) from four to two (retaining the general and passive baskets while eliminating the foreign branch and section 951A baskets); and 

• Amend section 958 to restore the limitation on downward attribution of stock ownership from foreign persons to US entities for determining CFC status, which limitation had been removed as part of the 2017 Tax Cuts and Jobs Act. 

The bill also would maintain (i) the current 37.5% deduction for Foreign Derived Intangible Income (FDII), (ii) the current 50% deduction for Global Intangible Low-Taxed Income (GILTI), and (iii) the current 10% rate used in the calculation of the Base Erosion and Anti-Abuse Tax (BEAT), which is similar to a provision in the OBBB which provides for only modest changes to the tax rates for FDII, GILTI and BEAT.²

Whether any of these provisions is ultimately included in a Senate version of the OBBB is uncertain. But, the proposed legislation gives insight into the types of international tax changes that may be under consideration as the OBBB moves through the Senate. 

Recent Eversheds Sutherland Tax insights 

Scope of tax exemption for religious entities: The Catholic Charities case

One Big Beautiful Bill impact on non-US persons with US investments or activities

ERC enforcement under the One Big Beautiful Bill Act: Third time's the charm? [subscription required]

If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.

_{1 Please see here for our insights on the various aspects of the OBBB, and please see here for our Tax Reform Law Blog, which tracks tax legislative updates.} 

_{2 Notably, these changes differ from the OBBB, which would (i) apply a 36.5% deduction for FDII, (ii) apply a 49.2% deduction for GILTI, and (iii) use a 10.1% rate in the calculation of BEAT. Absent the enactment of either S. 1605 or the OBBB, the deduction for FDII will decrease to 21.875%, the deduction for GILTI will decrease to 37.5%, and the rate used in the calculation of BEAT will increase to 12.5%, in each case, for taxable years beginning after December 31, 2025.}