The leading economies in the world have closed a deal to save the largest companies in the US to pay more corporation tax abroad, so that the status of the largest global tax deal is questioned in more than a century.
The agreement between Washington and other members of the G7 group leading countries could fundamentally change a historical agreement to set up a global minimum load to limit avoidance by multinationals.
The G7 said on Saturday that it had agreed to a “side-by-side solution” of taxation that would exempt American companies from some parts of the new worldwide tax regime because of the taxes they pay in the US.
The G7 added that the agreement “would facilitate further progress to stabilize the international tax system”, including “constructive dialogue” about the preservation of “the tax sovereignty of all countries”.
The new regulations will be discussed in the coming weeks at the OECD, the international organization that has reached the minimum tax accommodation of 2021 but will be dominated by G7 members, according to people who are familiar with the discussions.
Mathias Cormann, Secretary General of the OECD, described the G7 statement as “an important milestone in international tax employees”.
“This is a SLAM Dunk for the United States,” said Robert Goulder, a tax lawyer and contributing editor at tax analysts, a news service for tax professionals. “I think they are celebrating by doing high-fives with the treasury.”
The shift came after the US includes facilities in the radical “big wonderful account of President Donald Trump, referred to as section 899, which would enable the US to take revenge against alleged discriminatory taxes elsewhere by imposing revenge tax” on foreign investments.
Prior to the G7 declaration, Finance Minister Scott Bessent said that he would ask the congress to remove the revenge tax measures from US legislation due to the approaching changes in the OECD deal.
He added that these revisions American companies would save $ 100 billion in tax payments to foreign governments in the coming decade.
The British Chancellor Rachel Reeves said on Saturday that the G7 agreed that “there is work to do when tackling aggressive tax planning and avoidance and guaranteeing a field game field”.
“The correct environment for this work is without the prospect of retaliation tax that hangs on these conversations, so the removal of section 899 is welcome,” she added.
Markus Meinzer, policy director at the Tax Justice Network, a campaign group, labeled the G7 deal a “Hasty Cave-in” who would leave the minimum tax deal “Death”.
He added: “The US is trying to release itself by deepening others, which would make the tax deal completely useless. A ship with a hole in the US in its hull will not float.”
But Manal Corwin, head of tax on the OECD, described the G7 statement as a non -binding, adding that every proposal at the OECD level should be approved by 147 countries.
“The G7 itself cannot make this call,” she added.
The OECD agreement to establish a global minimum load was reached in 2021 by more than 135 countries to prevent tax avoidance by multinationals and to update the international tax system for a digital age.
It has set a minimum tax rate of 15 percent of the worldwide profit on the largest multinationals from the US and elsewhere, which was implemented by various countries last year.
Under provisions that in particular made the Republicans in the US angry, the OECD agreement was able to cancel the tax on American companies on American companies that were considered “underloaded”.
But the OECD rejects the idea that other countries can now come back for the global minimum tax – or that American companies would have companies from other countries that have adopted the regime.
“If there was something, where we were previously uncertainty and an inability to continue because of various threats of retribution, that made it very difficult and risked it [of the minimum tax]”Corwin said.
She argued that every idea that the American tax system was a “light touch” “not necessarily accurate”, and claimed that there were “many ways” in which it was stricter.
A French officer added that the G7 agreement had taken a few nods to the US, [by] Saying that their tax legislation helps them to comply with “with the OECD deal” what a concession is, but. . . worth it “.
But Joseph Stiglitz, the Nobel-Economic Laureate who is also co-chair of the Independent Commission for the reform of international corporation tax, said that the G7 agreement was an indication that governments “had the interests of multinationals for small and medium-sized companies, their own citizens and average people on the average people on the average people on the.
He added: “It is unacceptable that some governments choose to give up government income – especially now, and precisely the most powerful economic actors.”
The G7 statement also expected continuous discussions about the tax on the digital economy. Taxes of digital services have been a point of tension between the US and other countries that want to increase taxes on American technical giants.
Donald Trump, US President, said on Friday that he canceled commercial conversations with Canada after Ottawa said it would impose a new tax on technology companies.
