The One, Big, Beautiful Bill
The One, Big, Beautiful Bill, proposed by the Republican Party in the United States, suggests a 5% remittance tax (exercise tax) on remittances sent by non-U.S. citizens, including visa and green card holders. According to Indian media outlet Business Standard, India received a total of $32.9 billion in remittances in 2023-24. If the tax law comes into effect, Indian expatriates may need to pay an additional $1.6 billion in taxes each year.
What is The One, Big, Beautiful Bill?
The One, Big, Beautiful Bill, proposed by the Republican Party in the United States, addresses fiscal policies, including taxation, border security, defense spending, and energy policies. It is a budget reconciliation bill currently under consideration by the U.S. Congress, aimed at expediting the passage of specific policies.
Will remittances be taxed?
The bill proposes a 5% transaction tax on international remittances sent by non-U.S. citizens. The tax applies to non-U.S. citizens, including holders of non-immigrant visas (such as H-1B, L-1, F-1, etc.), green card holders, and undocumented immigrants.
The provision will apply to all remittance transactions from the United States to overseas, with no minimum amount threshold, meaning even small transfers will be subject to taxation. It covers transfers made through banks, wire transfer services (such as Western Union), PayPal, and other platforms.
The tax will be deducted directly by the remittance service provider (such as banks or wire transfer companies) at the time of the transaction and will be paid quarterly to the U.S. Treasury. If the service provider fails to deduct the tax at the time of transfer, they will also bear the tax liability.
Who will be affected by the remittance tax?
If the bill is passed, it is expected to impose taxes on remittance transactions (exercise tax) starting January 1, 2026. Those affected include H-1B visa holders, green card holders, and others, particularly individuals supporting family living, education, healthcare, or investments (such as real estate and securities) back home.
India is the world’s largest recipient of remittances, receiving approximately $32.9 billion from the U.S. in the 2023-2024 fiscal year, accounting for 27.7% of India’s total remittances ($118.7 billion). If the tax law comes into effect, Indian expatriates may need to pay an additional $1.6 billion in taxes each year (assuming remittance amounts remain unchanged). Other major remittance-receiving countries include Mexico, China, and the Philippines, whose immigrants will also be affected.
The remittance tax may reduce the cash flow of immigrant families, impacting their ability to support, save, and invest in their home countries.
Experts warn that the tax could lead to increased use of illegal remittance channels or reduce the amount of remittances sent. Banks and wire transfer companies may also suffer a loss of fee income due to decreased transaction volumes.
Critics argue that the tax will have a more significant impact on low-income and middle-class immigrant families, as they typically send a large portion of their income back home to support their families’ livelihoods.
Does the remittance tax benefit cryptocurrencies?
For cryptocurrency users, the bill may prompt regulators to require more user information (such as recipient location), leading to privacy disputes. If non-U.S. citizens use cryptocurrencies for international remittances, such as transferring Bitcoin or stablecoins like USDT to overseas accounts through cryptocurrency exchanges or wallets, those transactions may be classified as “remittance transactions” and subject to the 5% remittance tax.
Taxes may also apply to transactions conducted through “qualified remittance transfer providers,” which include U.S.-regulated cryptocurrency exchanges (like Coinbase, Kraken) or platforms offering cross-border transfer services. The bill requires remittance service providers to verify the sender’s identity at the time of transfer to determine whether they are U.S. citizens, which may compel cryptocurrency exchanges to enhance KYC procedures and collect more user data, such as citizenship, Social Security Number (SSN), or residency status.
P2P and DEX temporarily exempt
Peer-to-peer (P2P) transfers between individuals may temporarily evade taxation, as these transactions may not necessarily go through regulated service providers. However, for platforms with higher anonymity (such as decentralized exchanges, DEX), regulators may in the future require compliance with similar regulations, or they may face fines or operational restrictions.
Currently, this bill is still under review, and whether it will be passed or the details of its implementation will await further developments.
Risk Warning
Investing in cryptocurrencies carries high risks, and their prices may fluctuate dramatically, which could result in the loss of your entire principal. Please assess the risks carefully.