By Bob Peebler.
Last year, the One Big Beautiful Bill Act (OBBBA) was signed into law, ushering in new reporting obligations that will reshape international tax frameworks, domestic research incentives, and business interest deductions.
Software companies will feel this most acutely. Their business models — built on global operations and intangible asset monetization — sit directly in the crosshairs of these new rules. As CFOs and finance leaders navigate these sweeping changes, they are faced with a challenge: ensuring short-term compliance while also positioning their organization for long-term tax optimization.
The companies that treat OBBBA as purely a compliance exercise will survive. The ones that use it to fundamentally rethink their tax strategy will have a competitive advantage.
Understanding OBBBA’s Impact on Software Firms
Multinational technology companies must assess the impact of changes to the U.S. international tax framework that may impact intellectual property and structure cross-border operations. The implications will depend on business model, where a company operates, what its assets are, etc.
Organizations should seek professional tax advice to evaluate their organization’s strategy and consider the following items:
- Updates to Foreign-Derived Intangible Income (FDII), Base Erosion and Anti-Abuse Tax (BEAT), and Global Intangible Low-Taxed Income (GILTI) provisions will influence how intangible assets are structured and taxed.
- U.S.-domiciled entities are now excluded from Pillar 2 top-up tax calculations, adopted as a Side-By-Side (SbS) provision negotiated with the G7 in exchange for removing a proposed retaliatory tax under Section 899.
- Substantial changes to how research and development (R&D) expenses are treated.
- Updates to the Business Interest limitation under Section 163J will raise the cap on how much interest a business can deduct.
With these changes, software companies need to examine not just where they conduct operations, but how they structure them. Scenario modeling will become critical to understanding how profitability, pricing, and R&D-heavy operations will be taxed under OBBBA.
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Optimizing Your Organization’s Tax Strategy
To optimize their tax strategy, enterprises should first map their current entity structures against new reporting requirements to identify what needs to be addressed to remain compliant and where there are opportunities for the business.
For example, there are significant cash flow benefits to locating the activity domestically in the U.S. as taxpayers will be allowed to deduct domestic software development costs as R&E expenditures. However, it’s worth noting that there will be greater IRS scrutiny on R&D claims from 2025 and more detailed technical data will be required. To make these determinations, companies will have to track and identify domestic vs. foreign R&D expenses. They’ll also have to make the decision to either immediately deduct costs or capitalize and amortize them.
This is where the right systems become strategic, not just operational. Having advanced tax technology in place can streamline workflows and improve visibility across different records and positions, enabling finance teams to simulate different outcomes to forecast both tax liabilities and cash flow implications. As reporting timelines shorten, workflow automation becomes critical. Many platforms now include built-in controls and audit trails, making it easier to demonstrate compliance during IRS review.
Modern tax management platforms also reduce the risk of inaccuracies by standardizing calculations and providing a single source of truth across finance and tax teams.
By embracing automation, integration, and advanced analytics, CFOs can move beyond simply keeping pace with OBBBA requirements to using these changes as an opportunity to strengthen governance, create meaningful efficiencies, and empower their teams to use their time and mindshare for more strategic work.
Turning Compliance Into Competitive Advantage
Most companies will treat OBBBA as a compliance project — something to simply get through, check the box, and move on. That’s a mistake.
The organizations that use these changes to rethink how tax integrates with business strategy won’t just be compliant — they’ll open themselves up to the opportunity of lower effective tax rates, better cash flow positioning, and cleaner entity structures that support growth rather than constrain it.
To get to that point will require significant work: restructuring entities, upgrading systems, and building new reporting processes. The thing to remember is that the cost of reactive, quarter-to-quarter compliance —missed optimization opportunities, IRS scrutiny, and structures that limit strategic flexibility — is far higher.
The disruption is happening either way. Finance leaders have a choice: treat 2026 as a year of regulatory burden or use it to build a tax function that creates competitive advantage.
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As Senior Vice President, Finance, at insightsoftware, Bob brings more than two decades of finance leadership experience spanning SaaS, technology, and private equity–backed organizations. Most recently, he served as Senior Vice President of Finance at Zywave, a Clearlake Capital–backed InsurTech SaaS platform, where he played a pivotal role in scaling the business from $100M to $225M ARR through seven acquisitions—overseeing integration and building unified reporting across products and customers. Prior to Zywave, Bob held senior leadership roles at Vivi International, Zovio, and Blue Yonder, where he built and scaled high-performing finance teams, led multiple transformation initiatives, and partnered with executives and investors to drive measurable business results.
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