(US, 29th) The United States and other G7 members have agreed to support an arrangement that exempts American companies from being bound by certain provisions of the current global agreement.
According to Bloomberg and Reuters, on Saturday (June 28), the Group of Seven (G7) released a statement saying that the US agreed to remove a provision from former President Trump's tax and spending bill that would have increased taxes on income earned in the US by non-US companies and individuals.
This Article 899 is referred to as a “retaliatory tax” because it only raises the tax rates for countries deemed by the US government to have discriminatory tax policies.
The statement said the G7 also agreed to create a “side-by-side” system that recognizes the existing US minimum tax law, aimed at enhancing the stability of the international tax system.
Under the deal, other G7 members will support the US position in negotiations at the Group of Twenty (G20) and the Organisation for Economic Co-operation and Development (OECD). The OECD has been hosting global talks on corporate taxation, some of whose proposals have been opposed by the United States.
The US Treasury said that after Article 899 was removed from the Senate version of the tax and spending bill, there is now consensus among parties that a “side-by-side system” can be used to preserve the progress made by members of the “inclusive framework” in preventing corporate tax evasion and profit shifting.
The G7 said they look forward to finding a solution that is “acceptable and implementable by all parties,” and that scrapping the retaliatory tax was key to the G7 countries reaching an agreement.
In January this year, Trump announced by executive order that the global minimum corporate tax agreement would not apply to the US, effectively withdrawing the US from the milestone 2021 agreement that the Biden administration negotiated with nearly 140 countries.
He also vowed to impose retaliatory taxes on countries that tax US companies under the 2021 global tax agreement. This tax is considered unfavorable to many foreign companies operating in the US.
According to Bloomberg and Reuters, on Saturday (June 28), the Group of Seven (G7) released a statement saying that the US agreed to remove a provision from former President Trump's tax and spending bill that would have increased taxes on income earned in the US by non-US companies and individuals.
This Article 899 is referred to as a “retaliatory tax” because it only raises the tax rates for countries deemed by the US government to have discriminatory tax policies.
The statement said the G7 also agreed to create a “side-by-side” system that recognizes the existing US minimum tax law, aimed at enhancing the stability of the international tax system.
Under the deal, other G7 members will support the US position in negotiations at the Group of Twenty (G20) and the Organisation for Economic Co-operation and Development (OECD). The OECD has been hosting global talks on corporate taxation, some of whose proposals have been opposed by the United States.
The US Treasury said that after Article 899 was removed from the Senate version of the tax and spending bill, there is now consensus among parties that a “side-by-side system” can be used to preserve the progress made by members of the “inclusive framework” in preventing corporate tax evasion and profit shifting.
The G7 said they look forward to finding a solution that is “acceptable and implementable by all parties,” and that scrapping the retaliatory tax was key to the G7 countries reaching an agreement.
In January this year, Trump announced by executive order that the global minimum corporate tax agreement would not apply to the US, effectively withdrawing the US from the milestone 2021 agreement that the Biden administration negotiated with nearly 140 countries.
He also vowed to impose retaliatory taxes on countries that tax US companies under the 2021 global tax agreement. This tax is considered unfavorable to many foreign companies operating in the US.