One Big Beautiful Bill Act (OBBBA) - From GILTI to NCTI

The One Big Beautiful Bill Act (OBBBA) quietly rewrote one of the most consequential areas of U.S. international tax — rebranding GILTI (Global Intangible Low-Taxed Income) as NCTI (Net CFC Tested Income).

But behind the name change lies a profound policy shift: from a hybrid territorial system to a quasi-worldwide model designed to align—at least cosmetically—with the OECD’s global minimum tax.

In this episode, we unpack what really changed, what didn’t, and why it matters for multinationals, policymakers, and tax planners.

🧩 Key Topics Covered

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• The Origin Story: How GILTI emerged under the 2017 Tax Cuts and Jobs Act.
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• What OBBBA Changed: From QBAI removal to expense allocation and income blending.
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• Effective Rates & the Pillar 2 Paradox: Why the new NCTI rate stays below 15%.
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• The Politics of Blending: How Congress protected U.S. competitiveness while appearing compliant with OECD norms.
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• Practical Implications: What CFOs, tax directors, and advisors need to know for 2026 and beyond.
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💡 Key Takeaways

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• NCTI = GILTI 2.0 — broader base, lower effective rate.
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• Blending Survives: Cross-jurisdictional offsets remain the biggest taxpayer win.
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• QBAI Is Gone: No more routine return exclusion; all active income now tested.
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• Interest Allocation Tightens: Less FTC capacity, more domestic loss absorption.
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• Optics vs. Reality: The U.S. looks aligned with global norms—without actually paying more.
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🧠 Why It Matters

This reform represents Washington’s latest attempt to balance international competitiveness with global tax diplomacy. While branded as simplification, OBBBA’s changes deepen the complexity of U.S. cross-border taxation — and open new strategic questions for global tax planning.