Lawmakers to remove section 899 from tax bill.

Lawmakers to remove section 899 from tax bill.

In a significant development, the U.S. Treasury Department has reached a deal with G-7 allies to exclude U.S. companies from certain taxes imposed by other countries. This agreement has led to the removal of Section 899, also known as the "revenge tax," from the tax bill proposed by President Donald Trump [1].

The agreement, announced by Treasury Secretary Scott Bessent, stipulates that OECD Pillar 2 taxes will not apply to U.S. companies. These taxes were intended to impose a 15% minimum tax on global corporate profits, based on the residence of the corporation [1]. The deal aims to provide greater certainty and stability for the global economy, enhancing growth and investment in the United States and beyond [1].

Section 899, proposed in the tax bill, was designed to counter several European nations, Canada, Australia, and more from taxing U.S. corporations in a manner deemed discriminatory by Republicans. The "revenge tax" sparked fears on Wall Street that it would deter foreign investors and companies from investing in U.S. tech companies [1].

The agreement has been welcomed by many in the financial community, who see it as a positive step towards international tax cooperation. Tax consultancy RSM noted that Section 899 would have increased tax rates on various classifications of income, modified the application of tax treaties, and required more stringent application of base erosion and anti-abuse tax [1].

The removal of Section 899 from consideration in the One, Big, Beautiful Bill is a significant development for U.S. companies and investors. It is expected to reduce uncertainty and potential barriers to international investment.

References:
[1] https://seekingalpha.com/news/4463099-treasury-department-strikes-deal-to-remove-revenge-tax-from-tax-bill