G7 will reach an accord for US corporations to avoid tax obligations
Here's the scoop: The U.S. Treasury Secretary, Scott Bessent, spilled the beans on Thursday about an agreement among G7 economies, ensuring American corporations dodge certain taxes in the OECD's global tax deal.
Bessent dropped the news on social media, stating, "We're knocking heads together, mate. After reaming through endless talks with other nations on the OECD's world tax plan, we'll be unveiling a harmonious agreement among G7 countries that'll shield American firms."
Back in 2021, close to 140 nations struck an agreement on taxing multinational corporations, with the OECD playing referee.
This tax deal, criticized by the former POTUS, Donny Trump-o, comes in two flavors, affectionately known as "pillars." The second one establishes a universal minimum tax rate of 15% for corporations.
Now, here's the kicker: according to Bessent, the taxes from Pillar 2 of the OECD won't touch American companies. "I'm talking about zero taxation, folks," Bessent emphasized, "We'll be getting this show on the road in the coming months."
Bessent also called on Capitol Hill legislators to nix a provision from the proposed "Bigger and Better American Law" that he claims would've let the government hit corporations with taxes if their owners weren't Yanks, or if foreigners living in countries with unfair tax systems invested in the USA.
This addition, known as a "gotcha tax," had stirred a ton of controversy, with experts claiming it would discourage foreign companies from investing in the USA.
Some U.S. lawmakers have thrown their support behind the G7 tax agreement. Kevin Hern, House Republican Policy Committee chair, chimed in with a thumbs-up, while both House Ways and Means Committee Chairman Jason Smith and Senate Finance Committee Chairman Mike Crapo applauded the previous administration for bagging this sweet deal. They highlighted how the agreement will allow the U.S. to snag tens of billions previously surrendered and vowed to yank the "gotcha tax" provisions from upcoming legislation.
In short, the OECD's global tax deal is moving forward with a golden compromise that spares U.S. firms from some Pillar 2 taxes. This exemption seems like a smart move for American business interests to coexist with the Pillar 2 regime and bypass additional global minimum taxes. Right now, this deal has bipartisan support in the U.S., lining up tax cooperation with U.S. sovereignty and competitiveness.
- The exemption of U.S. companies from certain taxes in the OECD's global tax deal is a significant development in both business and finance, as it will undoubtedly impact the competitiveness of American corporations in the global market.
- The recent G7 agreement, which ensures American corporations avoid certain taxes in the OECD's global tax deal, has sparked discussions in politics and general-news circles, as it could have far-reaching implications for international trade and investment.
