Latest news with #OECDPillar2
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Business Standard
8 hours ago
- Business
- Business Standard
US Treasury deal with G7 kills 'revenge tax' that spooked Wall Street
By Daniel Flatley and Lauren Vella (BTAX) The Treasury Department announced a deal with G-7 allies that will exclude US companies from some taxes imposed by other countries in exchange for removing the Section 899 'revenge tax' proposal from President Donald Trump 's tax bill. 'OECD Pillar 2 taxes will not apply to US companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months,' Treasury Secretary Scott Bessent said on social media Thursday. 'Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill,' he added. The tax has sparked fears on Wall Street that the proposal would make it much harder for foreign individuals and companies to invest in the US. The levy targets allies that have digital services taxes on US tech companies, as well as countries imposing a global minimum tax on corporations. The market reaction was largely muted. The Bloomberg Dollar Index declined for a fourth day, Treasuries rallied and the S&P 500 approached an all-time high, all largely before the deal was announced late Thursday afternoon. 'Removing Section 899 from the budget negotiations would potentially allow investors to breathe a sigh of relief,' said Gennadiy Goldberg, head of US rates strategy at TD Securities. 'That said, it's difficult to know if the market seriously expected this statute to make it into the final law.' The measure included in Trump's bill came to be known as the revenge tax because it would increase tax rates only for countries whose tax policies the US deems 'discriminatory.' The Organization for Economic Co-operation and Development has been hosting global talks over corporate taxes, with some of the proposals drawing opposition from the US. The revenge tax targeted a part of the OECD's 15 per cent global minimum tax that former Treasury Secretary Janet Yellen helped negotiate while former President Joe Biden was in office. Republicans and Trump administration officials have criticized the deal for ceding US taxing authority to other countries. The global minimum tax is part of a larger deal agreed to by more 140 countries at the OECD that seeks to impose a 15 per cent minimum tax rate on multinational companies in every country where they operate. Trump's Treasury in recent weeks has pushed for the US tax system to be considered completely separate from the OECD's global tax framework, arguing that the US already robustly taxes income that American companies earn overseas. 'It's definitely a positive development for non-US investors who invest frequently in the US,' said Scott Semer, partner with Torys LLP in New York. 'It'll definitely be helpful to provide certainty to investments.'
France 24
10 hours ago
- Business
- France 24
US Treasury signals G7 deal excluding US firms from some taxes
"After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he said in a series of social media posts. Nearly 140 countries struck a deal in 2021 to tax multinational companies, an agreement negotiated under the auspices of the Organisation for Economic Co-operation and Development (OECD). This deal has two "pillars," the second of which sets a minimum global tax rate of 15 percent. "OECD Pillar 2 taxes will not apply to US companies," he wrote, adding that officials will work to implement the agreement across the OECD-G20 Inclusive Framework in the coming months. US President Donald Trump has pushed back on the global tax agreement, with Bessent on Thursday pointing to advances on that front. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill," Bessent added, referring to a bill currently before US lawmakers that would slash social program spending for tax cuts. 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.
The Advertiser
11 hours ago
- Business
- The Advertiser
Super funds spared multi-billion dollar 'revenge tax'
Australian superannuation funds have been spared a multi-billion dollar hit after Treasury Secretary Scott Bessent announced the US would drop a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed big beautiful bill, which would have raised taxes by up to 15 percentage points on foreign entities in retaliation to "unfair taxes" other countries had imposed on US companies. But Mr Bessent revealed the section would be removed from the bill in a social media post early on Friday, after a deal was reached with G7 nations allowing the US to back out of a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he wrote on X. "OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." The announcement was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds more than $600 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. Treasurer Jim Chalmers raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, when he told reporters he was hopeful of positive development in the coming days. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. "And once again, I'm very grateful to Scott Bessent for hearing me out and for also undertaking to make what progress he can to try and resolve these issues. "I'm confident he understands these issues." In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill". Australian superannuation funds have been spared a multi-billion dollar hit after Treasury Secretary Scott Bessent announced the US would drop a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed big beautiful bill, which would have raised taxes by up to 15 percentage points on foreign entities in retaliation to "unfair taxes" other countries had imposed on US companies. But Mr Bessent revealed the section would be removed from the bill in a social media post early on Friday, after a deal was reached with G7 nations allowing the US to back out of a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he wrote on X. "OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." The announcement was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds more than $600 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. Treasurer Jim Chalmers raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, when he told reporters he was hopeful of positive development in the coming days. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. "And once again, I'm very grateful to Scott Bessent for hearing me out and for also undertaking to make what progress he can to try and resolve these issues. "I'm confident he understands these issues." In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill". Australian superannuation funds have been spared a multi-billion dollar hit after Treasury Secretary Scott Bessent announced the US would drop a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed big beautiful bill, which would have raised taxes by up to 15 percentage points on foreign entities in retaliation to "unfair taxes" other countries had imposed on US companies. But Mr Bessent revealed the section would be removed from the bill in a social media post early on Friday, after a deal was reached with G7 nations allowing the US to back out of a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he wrote on X. "OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." The announcement was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds more than $600 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. Treasurer Jim Chalmers raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, when he told reporters he was hopeful of positive development in the coming days. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. "And once again, I'm very grateful to Scott Bessent for hearing me out and for also undertaking to make what progress he can to try and resolve these issues. "I'm confident he understands these issues." In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill". Australian superannuation funds have been spared a multi-billion dollar hit after Treasury Secretary Scott Bessent announced the US would drop a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed big beautiful bill, which would have raised taxes by up to 15 percentage points on foreign entities in retaliation to "unfair taxes" other countries had imposed on US companies. But Mr Bessent revealed the section would be removed from the bill in a social media post early on Friday, after a deal was reached with G7 nations allowing the US to back out of a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he wrote on X. "OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." The announcement was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds more than $600 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. Treasurer Jim Chalmers raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, when he told reporters he was hopeful of positive development in the coming days. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. "And once again, I'm very grateful to Scott Bessent for hearing me out and for also undertaking to make what progress he can to try and resolve these issues. "I'm confident he understands these issues." In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill".
The Hill
13 hours ago
- Business
- The Hill
Revenge tax gets axed
The Big Story Treasury Secretary Scott Bessent asked House and Senate Republicans to scrap the 'revenge tax' on foreign investments from their versions of President Trump's sweeping tax bill. © Greg Nash In a post on the social platform X, Bessent said Thursday that he asked GOP lawmakers to strike Section 899, which would have imposed a tax of up to 20 percent on investments from countries with economic policies deemed unfair to U.S. businesses, from their legislation. Bessent said the provision was no longer necessary after the U.S. and its partners in the G7 reached a 'joint understanding … that defends American interests.' He said the deal will '[preserve] our tax base' and that 'OECD Pillar 2 taxes will not apply to U.S. companies.' OECD Pillar 2 is a global minimum tax agreement that the U.S. is a party to but that has not been domestically implemented so far. The retaliatory tax in the Republican tax-and-spending cut bill specifically called out Pillar 2's 'undertaxed profit rule' (UTPR) as well as digital services taxes that could apply to U.S. tech giants. The undertaxed profits rule allows U.S. subsidiaries of multinational companies to be taxed if their parent company isn't taxed at the base rate of 15 percent. The Hill's Sylvan Lane and Tobias Burns have more here. Welcome to The Hill's Business & Economy newsletter, I'm Aris Folley — covering the intersection of Wall Street and Pennsylvania Avenue. Did someone forward you this newsletter? Subscribe here. Essential Reads Key business and economic news with implications this week and beyond: Trump Mobile removes 'Made in the USA' language from site The Trump Organization's new mobile phone venture, Trump Mobile, has removed language from its website suggesting that its forthcoming smartphones will be made in the U.S. White House, senators eye September deadline for crypto framework A White House adviser and two key senators said Thursday they are now hoping to pass legislation laying out oversight of the crypto industry by the end of September, pushing back an earlier August deadline. Economy slips from most important issues list for first time this year: Poll The economy is not the most pressing issue for a majority of surveyed voters for the first time this year, according to a new poll. Tax Watch Senate referee rejects key Medicaid cuts in Trump's 'big, beautiful bill' Senate Parliamentarian Elizabeth MacDonough has rejected key Medicaid provisions in the Senate GOP megabill, a ruling that appears to strike a major blow to Republicans' strategy for cutting federal spending. The Senate's referee rejected a plan to cap states' use of health care provider taxes to collect more federal Medicaid funding, a proposal that would have generated hundreds of billions of dollars in savings to offset the cost of making President Trump's corporate tax cuts permanent, according to a Democratic summary of the parliamentarian's ruling. The decision could force Senate Majority Leader John Thune (R-S.D.) to reconsider his plan to bring the Senate bill up for a vote this week. The cap on health care provider taxes in both states that expanded Medicaid and did not expand Medicaid under the Affordable Care Act was projected to save hundreds of billions of dollars over the next 10 years, but it would have forced states to shoulder substantially more of the cost for Medicaid coverage. The Hill's Alexander Bolton has more here. Tax Watch is a regular feature focused on the fight over tax reform and extending the 2017 Trump tax cuts this year. Email a tip The Ticker Upcoming news themes and events we're watching: In Other News Branch out with more stories from the day: Windows' infamous 'blue screen of death' will soon turn black Nearly every Windows user has had a run in with the infamous 'Blue Screen of Death' at some point … Good to Know Business and economic news we've flagged from other outlets: What Others are Reading Top stories on The Hill right now: Hegseth slams Fox reporter at press conference: 'You've been about the worst' Defense Secretary Pete Hegseth attacked Jennifer Griffin, his former colleague at Fox News and a longtime member of the Pentagon press corps, amid a broader push to discredit media outlets reporting on intelligence laying out the extent of damages done by U.S. strikes to Iranian nuclear sites. Read more GOP senator calls for Senate parliamentarian to be fired after ruling against Medicaid cuts Alabama Sen. Tommy Tuberville (R) on Thursday called for Senate Majority Leader John Thune (R-S.D.) to fire Parliamentarian Elizabeth MacDonough 'ASAP,' hours after she delivered a major ruling against a Republican proposal to slash hundreds of billions of dollars in federal Medicaid spending to … Read more What People Think Opinions related to business and economic issues submitted to The Hill: You're all caught up. See you tomorrow! Thank you for signing up! Subscribe to more newsletters here
Perth Now
13 hours ago
- Business
- Perth Now
Super funds spared multi-billion dollar 'revenge tax'
Australian superannuation funds have been spared a multi-billion dollar hit after Treasury Secretary Scott Bessent announced the US would drop a so-called "revenge tax" on foreign investors. The super industry had been ringing alarm bells over section 899 of President Donald Trump's proposed big beautiful bill, which would have raised taxes by up to 15 percentage points on foreign entities in retaliation to "unfair taxes" other countries had imposed on US companies. But Mr Bessent revealed the section would be removed from the bill in a social media post early on Friday, after a deal was reached with G7 nations allowing the US to back out of a global minimum tax rate. "After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," he wrote on X. "OECD Pillar 2 taxes will not apply to U.S. companies, and we will work cooperatively to implement this agreement across the OECD-G20 Inclusive Framework in coming weeks and months. "Based on this progress and understanding, I have asked the Senate and House to remove the Section 899 protective measure from consideration in the One, Big, Beautiful Bill." The announcement was met with a sigh of relief from the $4.2 trillion Australian superannuation industry, which would have been particularly exposed to the tax, given it holds more than $600 billion worth of US assets. Modelling conducted for the Association of Superannuation Funds of Australia by consulting firm Mandala found it could have cut $3.5 billion from returns over the first four years. Treasurer Jim Chalmers raised Australia's concerns about the tax during a phone call with Mr Bessent on Wednesday, when he told reporters he was hopeful of positive development in the coming days. "We do not want to see our investors and our funds unfairly treated or disadvantaged when it comes to developments out of the US Congress," he said. "And once again, I'm very grateful to Scott Bessent for hearing me out and for also undertaking to make what progress he can to try and resolve these issues. "I'm confident he understands these issues." In a speech in June, Future Fund chair Greg Combet said US investments were a less attractive proposition for the sovereign wealth fund, in part because of the proposed tax hike contained in Mr Trump's "big beautiful bill".
