US Tax Landscape - March 2025

Mar 12, 2025

March 2025 - Key Dates to Watch

The month of March is bound to bring more news and developments from the Trump Administration for U.S. businesses, foreign businesses in the U.S., or those with transactions in the U.S.

Today, March 12, 2025:

Digital Assets Reporting: A resolution to repeal the tax regulations that created reporting requirements (Form 1099-DA) for digital asset brokers using decentralized finance (DeFi) systems has been passed by the US House of Representatives. Shortly after, the Senate approved its own bill on the matter, signaling support for such resolution in both chambers of the US Congress. The bill will move to the President for final approval.

Other Key Dates to Watch:

March 21, 2025:

Regulatory Freeze: The 60-day regulatory freeze on tax regulations mandated by President Trump under executive order is set to end, unless it is further extended. Specifically, the executive order called for:

An immediate regulatory freeze on enacting, proposing, issuing, or sending new regulations to the Office of the Federal Register, until the appointees of the corresponding departments and agencies in the new administration review and approve them;
An immediate withdrawal of any rules that have been sent to the Office of the Federal Register but have not been published yet, to allow for said review and approval; and
For the purposes of reviewing and allowing open comments about issues of fact, law, or policy that the rules may raise, postponing for 60 days from the date of the executive order, the effective date of any rules that were published in the federal register or issued in any manner but that have not yet taken effect. Where appropriate or deemed necessary, the 60-day period may be extended to allow for further re-evaluation of the said rules.

At the close of the Biden Administration, several final and proposed regulations were issued, which may be subject to review. Therefore, there is uncertainty regarding the extent to which these regulations or rulemaking may be withdrawn, modified, allowed to take effect, or deferred in their effective date.

Corporate Transparency Act: The interim final rule on the Beneficial Ownership Requirement is due to be issued, which may extend the filing deadline. For more information, please read our insight.

OECD Global Tax Deal: The Secretary of the Treasury is due to deliver findings and recommendations to President Trump on:

Foreign countries that are not in compliance with any tax treaty with the U.S. or have tax rules in place, or are likely to put tax rules in place, that are extraterritorial or disproportionately affect American companies.
Protective measures or actions the U.S. should adopt or take in response to non-compliance or tax rules.

On or about March 23, 2025:

Discriminatory Practices: Under executive order, agencies are due to report to the President on their evaluation of discriminatory practices by foreign countries on American companies broadly and in e-commerce, trade, and taxation.

At the forefront are tariffs, regulatory restrictions (“non-tariff barriers”), digital services tax on e-commerce, VAT regimes, among others.
E-commerce may encompass practices such as restrictions that require American companies to house or retain certain intellectual property or operations in-country.
Trade may encompass restrictions for entry into the local market, including tariffs or a long, complex, restrictive regulatory process including censorship or a practice that undermine free speech.

Tax regulations may encompass the imposition of a digital services tax for e-commerce, and possibility put pressure on the Value-Added Tax (VAT) or Goods and Services Tax (GST) regimes, the rate of which can be as high as 27% in some countries.

By April 1, 2025:

The Secretary of the Treasury is due to report to the President on the agency’s identification, evaluation, findings, and recommendations on measures that the U.S. should take in response to:

Foreign countries identified as engaging in what the agency deems to be unfair trade practices and currency manipulation or misalignment.
The loss of tariff revenue from the current implementation of the $800 or less, duty-free de minimis exemption.
Any foreign country that subjects U.S. citizens or corporations to discriminatory or extraterritorial taxes pursuant to Section 891 (see more details below).
Whether final rules issued in connection with U.S. investments in certain countries of concern provide sufficient control and address national security threats.

This insight focuses on tax-related matters and developments anticipated to occur in March 2025 based on the executive orders published as of the date of this insight. There may be more developments to come in the days and months ahead.

Please note that the respective executive orders also cover mandates for other agencies, including trade, commerce, and national security. Therefore, the above points are not intended to be a comprehensive list of all provisions encompassing the respective executive orders.

Internal Revenue Code (IRC) Section 891

IRC Section 891 allows the President to double U.S. taxes on corporations and citizens of foreign countries that target American companies with discriminatory taxes.

The code section was enacted in 1934 and remains unused. President Trump, through an executive order issued on February 21, 2025, mandated its agencies to consider it as a tool in evaluating retaliatory measures against practices by foreign countries that impose undue burdens on American companies.

Other Potential Measures

On 21 January 2025, members of the Ways and Means Committee of the US House of Representatives introduced H.R. 591, the ‘Defending American Jobs and Investment Act,’ to add IRC Section 899 to the US tax code.

If enacted, IRC Section 899 would increase taxes on the US income of foreign individuals and entities from a jurisdiction with an extraterritorial or discriminatory tax, such as a Under-Taxed Profit Regime (UTPR) in the Pillar Two rules or digital services tax, in increments of 5% each year for four years.

After four years, the cumulative 20% additional tax would apply each year the targeted tax remains in effect.

Furthermore, the proposal includes language that would override the treaty, effectively deny treaty benefits to individuals and entities located in a foreign jurisdiction imposing extraterritorial or discriminatory taxes.

For more information, Contact Us.

Disclaimer: The contents of this insight are intended for general information only. illumina CPA Group, Inc. is not, by means of this communication, rendering professional advice or services. Before making any decisions or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.