ARTICLE · 19 JUNE 2025

Canadian Businesses At Risk From Proposed U.S. Tax Changes

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A proposed U.S. tax measure, section 899, could significantly impact Canadian businesses and investors with U.S. ties. Introduced in response to what the U.S. deems "unfair foreign taxes", the legislation outlines...

CanadaTax

Cassandra Knapman

Section 899 imposes countermeasures to DST and undertaxed profits rule

Executive summary

A proposed U.S. tax measure, section 899, could significantly impact Canadian businesses and investors with U.S. ties. Introduced in response to what the U.S. deems "unfair foreign taxes", the legislation outlines potential tax hikes, including increases of withholding tax. As the proposal advances through the U.S. legislative process, taxpayers may need to reassess their cross-border structures and tax planning strategies.

Contained in the One Big Beautiful Bill, the U.S. budget bill, is a proposal for a new section of the tax code with potentially costly implications for Canadian businesses earning income from U.S. business activity and Canadian investors earning income from U.S. investments.

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