What is the ‘revenge tax’ in the US tax bill?

Provision allows United States to impose additional taxes on entities from countries that it says impose unfair taxes on US firms.

Tucked within the proposed “Big Beautiful Bill”, the more than 1,000-page tax and spending overhaul that United States President Donald Trump wants to see enacted in law, is a provision that is being referred to as a “revenge tax”.

The “Enforcement of Remedies Against Unfair Foreign Taxes” in Section 899 targets countries that the Trump administration believes impose unfair or discriminatory taxes on US companies and individuals, and will allow the US to impose additional taxes on entities from those countries.

The provision calls, for instance, for levies on revenue from digital services, such as data monetisation and online advertising.

The proposal also includes a higher minimum tax on the profits of foreign entities, even if those profits are earned outside US borders. This could impact passive income streams, such as interest and dividends, and may discourage international investors from countries flagged as discriminatory.