Final Passage of the One Big Beautiful Bill: What Australian Expats Need to Know

For Australian expats living in the United States or with U.S. financial ties, it’s important to understand how major legislation like the One Big Beautiful Bill (OBBB) comes to be. Also why it often arrives as a large, all-encompassing package.

In the U.S., Congress is expected to pass 12 individual appropriations bills each year to fund government operations, before the fiscal year ends on September 30. However, when lawmakers fail to meet this deadline (which is common), they often resort to omnibus bills. Usually, large legislative packages that combine multiple priorities into a single vote. This approach helps avoid government shutdowns and ensures essential services continue uninterrupted.

Omnibus bills also serve a strategic purpose. By bundling spending measures, policy reforms, and even controversial proposals into one bill, lawmakers can negotiate across party lines more effectively. Items that might struggle to pass on their own are often included in these larger bills. This makes them harder to oppose without rejecting the entire package.

These bills typically emerge during key windows in the legislative calendar, such as:

• The end of the fiscal year (September)
• Post-election transitions
• Debt ceiling or budget reconciliation deadlines

For expats, this means that significant tax and financial reforms can be introduced quickly and with wide-reaching implications. As result, often with little time to prepare.

Key Final Provisions of the One Big Beautiful Bill: What Australian Expats Should Know

The One Big Beautiful Bill (OBBB) introduces several international tax provisions. These could directly or indirectly affect Australian expatriates with U.S. ties. Whether you’re living in the U.S., investing across borders, or managing dual tax obligations, understanding these changes is essential for staying compliant and financially prepared.

1. Non-Enactment of the “Revenge Tax” (Proposed Section 899)

One of the more controversial proposals—Section 899—was ultimately not enacted. This provision would have imposed higher tax rates on individuals and entities associated with countries deemed to impose “unfair foreign taxes.” For Australian expats, this is a welcome outcome. Australia’s tax system could have been scrutinised under such a rule, potentially increasing U.S. tax exposure for Australians abroad. Its exclusion reflects diplomatic coordination between the U.S. and the Group of Seven (G7) nations.

2. Remittance Transfer Tax: What It Means for Expats

Initially proposed at 3.5%, the final version of the bill introduces a 1% excise tax on non-commercial remittance transfers. Specifically for cash payments sent abroad. This tax applies to both U.S. and non-U.S. citizens. Notably, U.S. citizens cannot claim a credit against it. For Australian expats sending funds back home or supporting family overseas, this could represent a new cost to consider in your financial planning. The tax takes effect after December 31, 2025, so now is a good time to review your remittance practices.

3. Permanent Extension of the New Markets Tax Credit (NMTC)

The OBBB permanently extends the New Markets Tax Credit. It incentivises investment in low-income U.S. communities through qualified Community Development Entities (CDEs). For Australian expats interested in impact investing or seeking U.S. tax-efficient opportunities, this extension may open doors to socially responsible investment strategies with potential tax benefits.

4. Other Noteworthy International Tax Reforms

Several technical but impactful changes in the OBBB, may affect Australian expats with international business interests or U.S. tax filing obligations:

• Reinstatement of Section 958(b)(4): This provision prevents unintended classification of foreign corporations as Controlled Foreign Corporations (CFCs), reducing the risk of triggering Subpart F income reporting. This issue often complicates expat tax filings.
• Introduction of Section 951B – Foreign Controlled U.S. Shareholders: This regime is designed to identify and regulate U.S. persons who own shares in foreign corporations that are not classified as Controlled Foreign Corporations (CFCs) under existing rules but still pose potential tax avoidance risks due to indirect control or influence. Expats with ownership in international businesses will have to tread more carefully and should reassess their structures for compliance.
• Extension of Section 954(c)(6)(C): This maintains the CFC look-through exception, which can simplify tax treatment of certain foreign income streams.
• Adjustment to Section 960(d)(1): Subpart F income is the US tax rule, designed to stop US taxpayers from using non-US companies that have income from investments and any other passive sources. Where a CFC has passive income, the US can tax the shareholder’s share of the income at the personal level. The deemed paid credit for Subpart F inclusions increases from 80% to 90%, potentially reducing the effective tax burden for expats subject to these rules.

Looking Ahead: What Expats Should Do Next

Now that the One Big Beautiful Bill has been signed into law by President Trump, the focus will shift to implementation. The U.S. Department of the Treasury will begin the rulemaking process.  That is proposing and finalising regulations that clarify how each tax provision will be applied in practice.

For Australian expats, this next phase is critical. The nuances of these new rules—particularly around remittance taxes, international ownership structures, and cross-border income—could have meaningful implications for your financial planning and tax compliance.

At Atlas Wealth Group, we’re closely monitoring these developments. We will continue to provide timely updates and expert insights tailored to the needs of Australian expatriates. If you’re unsure how these changes may affect your situation, or if you’d like to proactively review your financial structures, now is the time to seek professional advice.

Contact Us

If managing your financial affairs across borders is starting to feel overwhelming, you’re definitely not alone. It’s a complex space, and having the right support can make all the difference. At Atlas Wealth Group, we specialise in supporting Australian expats with cross-border tax planning, superannuation, and wealth management. Contact us to arrange a consultation with a qualified adviser who specialises in Australian expat financial planning to get personalised guidance tailored to your circumstances.

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