US multinationals on track for minimum tax reprieve after G7 deal

The world’s leading economies have agreed to an agreement to spare the largest companies in the United States to pay more corporate taxes abroad, while doubting the largest global tax deal in more than a century.

An agreement between Washington and other members of the G7 from the leading countries can change the 2021 agreement mainly to create the global minimum tax to eliminate the avoidance of multinational companies.

The Group of Seven said on Saturday that it had agreed to “a solution side by side” of taxes that would exempt American companies from some parts of the new global tax system due to the taxes they pay in the United States.

The Group added that the agreement “will facilitate more progress to achieve stability in the international tax system”, including “constructive dialogue” on preserving “tax sovereignty for all countries.”

The new arrangements are scheduled to discuss in the coming weeks in the Organization for Economic Cooperation and Development, the international organization that has reached minimum taxes in 2021 but is dominated by members of G7, according to persons familiar with discussions.

Matthias Korman, Secretary -General of the Organization for Economic Cooperation and Development, described the G7 statement as “an important milestone in international tax cooperation.”

“This is a diving in the United States,” said Robert Golder, a tax lawyer and a taxpayer who is a tax analyst, a news professional service. “I think they celebrate by doing high shapes in the cabinet.”

This transformation came after the United States included rulings on President Donald Trump, referred to as Section 899, would allow the United States to take revenge on alleged discriminatory taxes in other places by imposing “revenge taxes” on foreign investment.

Before the Group of Seven statement, Treasury Secretary Scott Payett said that he would ask congress to remove revenge tax measures from American legislation due to imminent changes in the deal of the Organization for Economic Cooperation and Development.

He added that these reviews will provide American companies $ 100 billion in tax payments for foreign governments over the next decade.

UK Chancellor Rachel Reeves said on Saturday that the Group of Seven agreed to “there is a work that must be done in dealing with aggressive tax planning and avoiding and ensuring a level playing field.”

She added: “The appropriate environment for this work is not the possibility of retaliatory taxes attached to these talks, and therefore the removal of section 899.”

Marcus Miners, director of policy in the tax network, a campaign group, G7, described a “hasty cave” deal that would leave the minimum “dead” tax deal.

He added: “The United States is trying to exempt itself through the arm of the arm of others, which would make the tax deal completely useless. A veil with a hole the size of the United States in its body will not float.”

But Manal Corin, the head of taxes at the Organization for Economic Cooperation and Development, described the G7 statement as not binding, adding that any proposal will need to be approved by 147 countries at the OECD level.

“The G7 alone can make this call,” she added.

The Organization for Economic Cooperation and Development Agreement in the Organization for Economic Cooperation and Development was reached to create a minimum global tax by more than 135 countries in 2021 to prevent taxes from multinationals and modernize the international tax system for the digital era.

The minimum tax rate of 15 percent of global profits has placed the largest multinational companies from the United States and other places, which were implemented by many countries last year.

According to the provisions that angered Republicans in particular in the United States, the Organization for Economic Cooperation and Development Agreement allowed other countries to impose taxes on American companies that are “beaten”.

But the Organization for Economic Cooperation and Development rejects the idea that other countries may now retract the minimum global tax – or that American companies will be a advantage for companies from other countries that have adopted the system.

“If anything, where we were before is uncertainty and the inability to proceed with a foot [of the minimum tax]Corin said.

She said that any idea that the US tax system is “a slight touch” “not necessarily accurate”, while maintaining the presence of “many ways” that were tougher.

A French official added that the G7 agreement “made some gestures to the United States, [by] The saying of their tax law helps them compatible with the “OECD deal”, which is a privilege. . . It is worth it.

But Joseph Steglitz, a Nobel Economy Prize winner, who is also a co -chair of the Independent Committee for the Warning of International Companies, said that the Group of Seven Agreement was an indication that governments “put the interests of multinational companies before the interests of small and medium -sized companies, their citizens and their ordinary members around the planet.”

He added: “It is unacceptable that some governments choose to abandon public revenues – especially now, especially from the most powerful economic actors.”

The statement of a group of 7 continuous discussions on digital economy taxes also expected. Digital services taxes were a tension point between the United States and other countries that are keen to increase fees on American technology giants.

Donald Trump, the US president, said on Friday that he canceled trade talks with Canada after Ottawa said it would impose a new tax on technology companies.