G-7 agrees to exempt US multinationals from global minimum tax
US President Donald Trump was deeply critical of the landmark minimum global tax rate of 15 per cent agreed by 140 countries in 2021. PHOTO: NYTIMES
LONDON - The Group of Seven (G-7) nations said on June 28 they have agreed to exempt US multinational companies from a global minimum tax imposed by other countries – a win for President Donald Trump's government, which pushed hard for the compromise.
The deal will see US companies benefit from a 'side-by-side' solution under which they will only be taxed at home, on both domestic and foreign profits, the G-7 said, in a statement released by Canada, which holds the group's rotating presidency.
The agreement was reached in part due to 'recently proposed changes to the US international tax system' included in Mr Trump's signature domestic policy Bill, which is still being debated in Congress, the statement said.
The side-by-side system could 'provide greater stability and certainty in the international tax system moving forward,' it added.
Nearly 140 countries struck a landmark deal in 2021 to tax multinational companies, an agreement negotiated under the auspices of the Organisation for Economic Co-operation and Development (OECD).
That agreement, deeply criticised by Mr Trump, includes two 'pillars,' the second of which sets a minimum global tax rate of 15 per cent.
The OECD must ultimately decide to exempt the US companies from that tax – or not.
The G-7 said it looked forward to 'expeditiously reaching a solution that is acceptable and implementable to all.'
On June 26, US Treasury Secretary Scott Bessent had signalled that a 'joint understanding among G-7 countries that defends American interests' was in the works.
He also asked US lawmakers to 'to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill' – Mr Trump's policy mega-Bill.
Section 899 has been dubbed a 'revenge tax,' allowing the government to impose levies on firms with foreign owners and on investors from countries deemed to impose unfair taxes on US businesses.
The clause sparked concern that it would inhibit foreign companies from investing in the United States. AFP
Join ST's Telegram channel and get the latest breaking news delivered to you.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
AsiaOne
3 hours ago
- AsiaOne
Trump's sweeping tax-cut, spending bill clears first US Senate hurdle, World News
WASHINGTON - The Republican-controlled US Senate advanced President Donald Trump's sweeping tax-cut and spending bill in a key procedural vote late on Saturday (June 28), raising the odds that lawmakers will be able to pass his "big, beautiful bill" in the coming days. The measure, Trump's top legislative goal, passed its first procedural hurdle in a 51 to 49 vote, with two Republican senators voting against it. The result came after several hours of negotiation as Republican leaders and Vice President JD Vance sought to persuade last-minute holdouts in a series of closed-door negotiations. The procedural vote, which would start debate on the 940-page megabill to fund Trump's top immigration, border, tax-cut and military priorities, began after hours of delay. It then remained open for more than three hours of standstill as three Republican senators - Thom Tillis, Ron Johnson and Rand Paul - joined Democrats to oppose the legislation. Three others - Senators Rick Scott, Mike Lee and Cynthia Lummis - negotiated with Republican leaders into the night in hopes of securing bigger spending cuts. In the end, Wisconsin Senator Johnson flipped his no vote to yes, leaving only Paul and Tillis opposed among Republicans. Trump was monitoring the vote from the Oval Office late into the night, a senior White House official said. The megabill would extend the 2017 tax cuts that were Trump's main legislative achievement during his first term as president, cut other taxes and boost spending on the military and border security. Nonpartisan analysts estimate that a version of Trump's tax-cut and spending bill would add trillions to the US$36.2-trillion (S$46 trillion) US government debt. Democrats fiercely opposed the bill, saying its tax-cut elements would disproportionately benefit the wealthy at the expense of social programmes that lower-income Americans rely upon. Chuck Schumer, the Senate's top Democrat, demanded that the bill be read aloud before debate could begin, saying the Senate Republicans were scrambling to pass a "radical bill". "If Senate Republicans won't tell the American people what's in this bill, then Democrats are going to force this chamber to read it from start to finish," the New York Democrat said. [[nid:717548]]
AsiaOne
3 hours ago
- AsiaOne
Singaporeans need to be more aware of potential security threats amid Israel-Iran conflict: Shanmugam, Singapore News
Singaporeans must be more aware of potential security threats amid rising tensions from the Israel-Iran conflict, said Coordinating Minister for National Security K Shanmugam. Speaking to media on the sidelines of a community event in Nee Soon on Saturday (June 28), he stated that security is a joint responsibility. "Singapore has been so safe that the awareness in effect, [is] a bit low," he said. Shanmugam explained that people in this region, other regions or extremist organisations might want to make a point against Israeli, American or other Western assets, adding that there could be attacks from the far right on Muslim assets. "There is a ceasefire, but we don't know exactly what will happen after this," he said, adding that if Singapore is attacked, it will make international headlines. He also stated that Singapore has increased its security posture amid the conflict. "There is a possibility of attacks on both sides, he said, either by the far right attacking Muslims, or representatives of Muslim countries including Iran, and attacks on Western assets — American, European or Israeli." "So we have increased our security posture, working off different scenarios, but you know, you can never be absolutely sure." When asked if there has been increased suspicious or extreme activity since the US air strikes on Iran's nuclear facilities, Shanmugam said the authorities have not detected anything yet. "But they need to succeed only once," he warned. The Israel-Iran conflict, which began with Israel's airstrikes on June 13, went on for 12 days before a ceasefire was called by US President Donald Trump on June 25. Much of the population of 10 million fled Iran's capital, Tehran, after days of bombing. The US also struck three nuclear facilities in Iran on June 22, which reportedly set the latter's nuclear programme back by a few months according to CNN. In his first statement since the ceasefire was imposed, Iran's Supreme Leader, Ali Khamane, said Iran "slapped America in the face" by launching an attack against a major US base in Qatar following the latter's bombing raids. He added that Iran would never surrender. Trump sharply criticised these remarks on June 27, dropping plans to lift sanctions on Iran. He also said he would consider bombing Iran again if Tehran is enriching uranium to worrisome levels, Reuters reported. [[nid:719372]]
Straits Times
3 hours ago
- Straits Times
Trump's sweeping tax-cut, spending bill clears first US Senate hurdle
FILE PHOTO: Visitors to the U.S. Capitol rest in the shade on Capitol Hill in Washington, D.C., U.S., June 25, 2025. REUTERS/Nathan Howard/File Photo WASHINGTON - The Republican-controlled U.S. Senate advanced President Donald Trump's sweeping tax-cut and spending bill in a key procedural vote late on Saturday, raising the odds that lawmakers will be able to pass his "big, beautiful bill" in the coming days. The measure, Trump's top legislative goal, passed its first procedural hurdle in a 51 to 49 vote, with two Republican senators voting against it. The result came after several hours of negotiation as Republican leaders and Vice President JD Vance sought to persuade last-minute holdouts in a series of closed-door negotiations. The procedural vote, which would start debate on the 940-page megabill to fund Trump's top immigration, border, tax-cut and military priorities, began after hours of delay. It then remained open for more than three hours of standstill as three Republican senators - Thom Tillis, Ron Johnson and Rand Paul - joined Democrats to oppose the legislation. Three others - Senators Rick Scott, Mike Lee and Cynthia Lummis - negotiated with Republican leaders into the night in hopes of securing bigger spending cuts. In the end, Wisconsin Senator Johnson flipped his no vote to yes, leaving only Paul and Tillis opposed among Republicans. Trump was monitoring the vote from the Oval Office late into the night, a senior White House official said. The megabill would extend the 2017 tax cuts that were Trump's main legislative achievement during his first term as president, cut other taxes and boost spending on the military and border security. Nonpartisan analysts estimate that a version of Trump's tax-cut and spending bill would add trillions to the $36.2-trillion U.S. government debt. Democrats fiercely opposed the bill, saying its tax-cut elements would disproportionately benefit the wealthy at the expense of social programs that lower-income Americans rely upon. Chuck Schumer, the Senate's top Democrat, demanded that the bill be read aloud before debate could begin, saying the Senate Republicans were scrambling to pass a "radical bill". "If Senate Republicans won't tell the American people what's in this bill, then Democrats are going to force this chamber to read it from start to finish," the New York Democrat said. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
