Fact check: Which tax loopholes will the 2025 big beautiful bill close for corporations?

1. Which depreciation and expensing gaps are being shut — and why that matters

The bill reduces generous bonus depreciation and modifies Section 179 expensing, tightening prior rules that allowed accelerated cost recovery to significantly lower taxable income in early years ^{[1] [2]}. These changes limit immediate deductions for asset purchases, thereby spreading tax recognition and increasing taxable income in near-term periods; policymakers framed this as closing a loophole that overly subsidized capital-intensive firms. Law firm and tax analysts emphasize the practical effect: firms that previously used full bonus depreciation to shelter earnings will now have less ability to defer tax, which can raise effective tax rates for highly capitalized corporations ^[1].

2. R&D and research expensing — rebalancing incentives without removing them

The Act alters treatment of research and experimental expenditures, adjusting the timing or deductibility that had allowed firms to accelerate R&D write-offs ^[1]. Proponents argue this narrows an avoidance channel where firms shifted timing to reduce current tax liabilities, while critics warn it could dampen innovation incentives. Analysts note the law stops short of eliminating R&D incentives entirely, instead recalibrating the tax timing to preserve some support but reduce scope for aggressive tax planning. The debate centers on tradeoffs between raising revenue and maintaining competitive R&D tax policy ^{[1] [2]}.

3. Interest deductibility and Section 163(j) — limiting debt-driven base erosion

The legislation tightens the interest deductibility limitation under Section 163(j) to curb profit shifting through high leverage, a practice common in private equity and multinational structures ^{[1] [2]}. By narrowing deductible interest, the bill reduces opportunities to erode U.S. tax bases via intra-group loans and excessive debt allocations. Private equity players and leveraged firms are flagged as particularly affected, because converting ordinary income to tax-favored capital gains and using debt to extract value were central planning tools; the changes constrain those strategies and could alter transaction economics ^{[3] [4]}.

4. International tax toolkit — GILTI, FDII and BEAT adjustments that close offshore windows

The Act rewrites key international tax rules: GILTI, FDII, and BEAT are recalibrated, raising the BEAT standard rate and changing the FDII effective rate to reduce incentives to shift profits abroad ^[1]. It also reforms global intangible low-taxed income calculations to limit low-tax deferral. These moves close a suite of loopholes that allowed corporations to recharacterize income and claim favorable FDII rates, thereby retaining more taxable income in the U.S. The law aims to align reported profits with real economic activity, though complex transition rules and interaction effects will matter for multinationals ^{[1] [4]}.

5. Pass-throughs, SALT and private-equity carve-outs — winners, losers, and gray areas

While closing corporate loopholes, the bill permanently extends the Section 199A QBI pass-through deduction and raises the SALT cap to $40,000, creating mixed effects across business forms ^[2]. Private equity and registered investment companies receive provisions that may allow income characterization benefits and deferral until realization, potentially offsetting some corporate-targeted closures ^[3]. This reflects political compromise: policymakers narrowed corporate sheltering but preserved or expanded relief for certain noncorporate owners, producing an uneven landscape where impacts depend on entity structure and transaction type ^{[2] [3]}.

6. What analysts disagree on — transition costs, behavior change and enforcement reality

Analysts converge that the Act closes multiple loopholes, but disagree on magnitude and behavioral responses, especially for private equity and multinational firms ^{[3] [4]}. Some tax advisers forecast transactional changes that shift compensation forms or investment timing to regain advantages; others expect enforcement and tighter rules to limit retreat options ^{[2] [1]}. The law’s complex interplay of domestic and international provisions creates implementation questions, and compliance guidance from Treasury will determine whether closed loopholes remain sealed or new avoidance techniques emerge ^{[1] [2]}.

7. Bottom line — constrained avoidance, targeted concessions, and watchpoints

In sum, the One Big Beautiful Bill closes significant corporate avoidance channels — bonus depreciation, R&D timing, interest deductibility, and certain international profit-shifting rules — while preserving or enhancing some pass-through and SALT features, and providing nuanced relief for private equity and investment firms ^{[1] [2] [3]}. The net effect varies by firm type: capital-intensive and highly leveraged multinational corporations face tighter rules, whereas pass-through owners and certain funds may retain advantages. Close monitoring of Treasury guidance and industry responses will reveal whether the law achieves its base-broadening goals or prompts new planning strategies ^{[2] [4]}.