On September 25, some of the world’s top tax professionals gathered for a day of thought leadership and discussion on the evolving complexities of international tax law. The one-day summit, FUSION 2025, featured panelists from three different continents and seven countries — covering topics such as Pillar 2 updates, the impact of global trade wars, and trends among auditors in various regions of the world.
Below, we’re sharing some insights from a panel discussion focused on the One Big Beautiful Bill Act (OB3), a tax reform package passed by the U.S. Congress on July 4, 2025. The panelists for this session were Andrew McKinley, Managing Director at GTM; Thomas Schänzle, an International Tax Partner at WTS Global (Germany); Eugene Lim, a Founding Principal of Taxise Asia (Singapore); and Ahmed El Jilali, a Tax Partner at Tiberghien (Belgium).
OBBB Overview: Research and Experimental Costs
In the United States, the tax code has typically allowed taxpayers to deduct research and development expenses from their taxable income. However, in 2017, during the first Trump administration, R&D deductions faced new restrictions. Instead of receiving all of the tax benefits immediately from these investments, filers had to follow an amortization schedule: domestic R&D had to be amortized over a five-year period, and foreign R&D over a 15-year period.
OB3 lifted the amortization period for domestic investments, but kept it for foreign ones — a policy aimed at encouraging international companies to invest in R&D within the United States. While it may seem like a straightforward change, it will have ripple effects for many taxpayers. For example, these rules could impact a company’s ability to claim other tax benefits due to changes in its taxable income limit.
Belgium’s R&D Tax Incentives: A Global Magnet for Innovation
Belgium may be small in size, but it’s managed to attract a wealth of research and development activity in recent years. The country has strategically offered generous tax incentives designed to draw foreign R&D centers, much like OB3 is designed to do. Ahmed El Jilali of Tiberghien outlined some of the comparisons between Belgium’s tax policies and what’s now changing in the United States:
- Employment Incentives: Belgium rewards companies that employ researchers by granting them a wage-withholding tax exemption of up to 80% for eligible R&D staff. It’s one reason that Belgium has successfully attracted foreign researchers to work in the country.
- Investment Incentives: Companies that invest in R&D can deduct a portion of their investments from taxable income. Belgium is focused on incentivizing four main areas: renewable energy, carbon-free transportation, environmentally friendly technologies, and digital investments related to these other three categories.
- Innovation Income Deduction: Once a company’s R&D leads to intellectual property — such as patents or software — it can benefit from Belgium’s Innovation Income Deduction (IID), which allows up to 85% of income derived from IP to be exempt from taxation.
- Accelerated Depreciation for R&D Costs: In Belgium, R&D costs are typically amortized over a three-year period. However, a new reform under discussion in the government may allow companies to deduct 40% of R&D investments in the first year, which is designed to improve cash flow and reward early innovation.
Germany: A Step Toward Revitalizing Competitiveness
Germany’s economy — the traditional engine of the European Union — has faced mounting challenges in recent years. With negative growth, there has been rising pressure on sectors such as the automotive industry, prompting political leaders to create a more business-friendly environment. Thomas Schänzle from WTS Global gave an overview of some of the modest, recent changes in Germany:
- Accelerated Depreciation for Movable Fixed Assets: Effective July 1, 2025, companies across all industries in Germany can now depreciate up to 30% of qualifying investments into movable fixed assets, such as technology, machinery, and vehicles.
- Corporate Tax Rate Reduction: Germany is also planning to gradually lower its corporate tax rate to improve competitiveness. The current corporate income tax rate of 15% is set to decrease to 10% by 2032.
- Automotive Sector Supports: The country has enacted special incentives for electric vehicles, which serve the dual purpose of advancing Germany’s carbon-reduction goals and boosting the struggling automotive industry.
Singapore: A Global Leader in R&D Incentives
When it comes to fostering innovation, Singapore consistently ranks among the most R&D-friendly economies in the world. With a mix of generous tax deductions, flexible IP rules, and supportive talent programs, the city-state continues to attract global companies looking to develop and commercialize cutting-edge technologies. Eugene Lim of Taxise Asia gave a few examples of why Singapore has earned this reputation:
- Favorable Treatment for Intellectual Property (IP): Singapore does not tax capital gains, and yet it offers favorable rules for amortizing capital expenses related to IP acquisition. Companies can elect to amortize IP acquisition costs over five, 10, or 15 years, depending on their strategic and financial needs.
- Super Deductions: Singapore allows companies to claim a “super deduction” of up to 400% on qualifying R&D expenses. This drastically incentivizes companies to invest more aggressively in research centers within Singapore.
- IP Development Incentive (IDI): Similar to Belgium’s IID policy, Singapore offers this incentive, which rewards companies that develop and commercialize IP in Singapore. Qualifying IP income can be taxed at a reduced rate of 5% or 10%.
- Supporting R&D Talent: Beyond tax incentives, Singapore invests in human capital through training grants. Companies that hire and train R&D researchers can receive government grants covering up to 50% of employment costs during the first two years.
OB3’s Interest Expense Deductions
OB3 aimed not only to create new incentives but also to reinforce existing popular ones. In the latter category was the business interest expense deduction, which covers any interest paid on a loan that’s related to business operations.
The U.S. tax code currently allows businesses to deduct up to 30% of “adjusted taxable income” (ATI), but following OB3, the government is shifting how ATI will be calculated. Starting in 2026, deductions will be based on earnings before interest, taxes, depreciation, and amortization, known as the EBITDA approach (currently, it’s calculated afterward). This change will significantly increase the ceiling for business interest deductions.
How Auditors Operate in This Environment
As you can see, OB3 is not the only recent shift in the international tax landscape. Countries around the world are attempting to incentivize economic growth responsibly through the enactment of incentives and deductions.
On the other hand, new rules often carry with them the scrutiny of auditors. In the U.S., for example, there often is frustration from companies that would like to take advantage of these new rules but are hesitant to do so, fearing punishment from the IRS if they make any mistakes. In other countries, including Germany, aggressive tax audits are even more common than they are in the U.S.
How GTM Can Help
There are many moving parts in this new international tax and trade landscape. The need for contingency planning and modeling is at an all-time high. It’s imperative for multinational corporations and their U.S. shareholders to closely review how the new adjustments and attribution provisions will affect their global structures.
GTM offers a range of tax solutions and industry-leading expertise. Our team is available to walk clients through policy shifts, technology and automation solutions, and tax filings on your behalf or through a collaborative structure.
Learn more about the tax solutions we’ve brought to clients here. Reach out to GTM today to discuss how to prepare effectively for your tax future.
