The US Treasury Department has announced an agreement with G-7 allies that will exclude US companies from some taxes imposed by other countries, in exchange for the removal of Section 899 proposal, known as “Revenge Rate”, President Donald Trump’s tax bill.
“OECD Pillar 2 fees will not apply to US companies, and we will work cooperatively to implement this agreement under the OECDE-G20 inclusive framework in the coming weeks and months,” said Treasury Secretary Scott Bessent on social networks on Thursday (26).
“Based on this progress and understanding, I asked the Senate and the House to remove the protective measure of section 899 from the consideration in One, Big, Beautiful Bill,” he added.
Read more: Section 899: Trump’s obscure item in Trump’s fiscal megaproject generates anguish in Wall Street
Representatives of the mayor, Mike Johnson, and the leader of the majority in the Senate, John Thune, have not yet responded to requests for commentary on whether to remove the measure of the bill.
The arrangement, officially known as Section 899 and informally as a “revenge rate”, was prepared by House Republicans and supported by the White House to combat several European countries, Canada, Australia and other nations that rate US companies in a way that Republican legislators argue to be discriminatory.
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The tax generated fear in Wall Street that the proposal would make it very difficult to invest in individuals and foreign companies in the US. The rate targets allies that have taxes on digital services in US technology companies, as well as countries that impose a global minimum corporations tax.
The measure included in the Trump project was known as “revenge rate” because it would increase rates only to countries whose fiscal policies the US consider “discriminatory.”
Treasury Deputy Secretary Michael Faulkender, told Bloomberg News On Wednesday (25) that administration officials were close to a “advance” that would eliminate the need for a revenge rate proposal in the Trump bill.
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The Organization for Economic Cooperation and Development (OECD) has hosted global corporate tax negotiations, with some proposals facing US opposition.
The revenge rate aimed at a part of the OECD 15% global minimum tax that former Treasury Secretary Janet Yellen helped negotiate while former President Joe Biden was in office. Republicans and administration officials Trump criticized the agreement for giving in to the US Tax Authority to other countries.
The global minimum tax is part of a higher agreement signed by more than 140 OECD countries that seeks to impose a minimum rate of 15% on multinational companies in all countries where they operate.
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In recent weeks, Trump’s treasure has argued that the US tax system will be considered completely separated from the OECD’s global tax frame, arguing that the US is already in a robust tax the income that US companies earn abroad.
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