G7 agrees to avoid higher taxes for U.S. and UK companies
FILE PHOTO: A man walk past the G7 members flags at the Manoir Richelieu before the G7 Foreign Ministers summit in La Malbaie, Quebec, Canada March 12, 2025. REUTERS/Mathieu Belanger/File Photo
By Harshita Meenaktshi, Bipasha Dey and Promit Mukherjee
The United States and the Group of Seven nations have agreed to support a proposal that would exempt U.S. companies from some components of an existing global agreement, the G7 said in a statement on Saturday.
The group has created a 'side-by-side' system in response to the U.S. administration agreeing to scrap the Section 899 retaliatory tax proposal from President Donald Trump's tax and spending bill, it said in a statement from Canada, the head of the rolling G7 presidency.
The G7 said the plan recognizes existing U.S. minimum tax laws and aims to bring more stability to the international tax system.
UK businesses are also spared higher taxes after the removal of Section 899 from President Donald Trump's tax and spending bill.
Britain said businesses would benefit from greater certainty and stability following the agreement. Some British businesses had in recent weeks said they were worried about paying substantial additional tax due to the inclusion of Section 899, which has now been removed.
"Today's agreement provides much-needed certainty and stability for those businesses after they had raised their concerns," finance minister Rachel Reeves said in a statement, adding that more work was need to tackle aggressive tax planning and avoidance.
G7 officials said that they look forward to discussing a solution that is "acceptable and implementable to all".
In January, through an executive order, Trump declared that the global corporate minimum tax deal was not applicable in the U.S., effectively pulling out of the landmark 2021 arrangement negotiated by the Biden administration with nearly 140 countries.
He had also vowed to impose a retaliatory tax against countries that impose taxes on U.S. firms under the 2021 global tax agreement. This tax was considered detrimental to many foreign companies operating in the U.S.
© Thomson Reuters 2025.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Mainichi
an hour ago
- The Mainichi
Senators voting in weekend session to meet Trump's deadline for passing his tax and spending cuts
WASHINGTON (AP) -- The Senate is taking a key procedural vote that has dragged on for more than two hours during a rare Saturday evening session as Republicans struggled to advance President Donald Trump's package of tax breaks, spending cuts and bolstered deportation funds by his July Fourth deadline. The proceedings came to a standstill and Vice President JD Vance arrived at the Capitol to break a potential tie. Tense scenes were playing out in the chamber as senators huddled in negotiations. Several Republican senators were registering their opposition to proceeding to open debate on the bill. Republicans are using their majorities in Congress to push aside Democratic opposition, but they have run into a series of political and policy setbacks. Not all GOP lawmakers are on board with proposals to reduce spending on Medicaid, food stamps and other programs as a way to help cover the cost of extending some $3.8 trillion in Trump tax breaks. "It's time to get this legislation across the finish line," said Senate Majority Leader John Thune, R-S.D., as the session was underway. Ahead of the expected roll call, the White House released a statement of administrative policy saying it "strongly supports passage" of the bill that "implements critical aspects" of the president's agenda. Trump himself was at his golf course in Virginia on Saturday with GOP senators posting about it on social media. But as the day stalled, billionaire Elon Musk lashed out, calling the package "utterly insane and destructive." "The latest Senate draft bill will destroy millions of jobs in America and cause immense strategic harm to our country!" the former top Trump aide said in a post. The 940-page bill was released shortly before midnight Friday, and senators are expected to grind through the days ahead with all-night debate and amendments. If the Senate is able to pass the bill, it would need to return to the House for a final round of votes before it could reach the White House. With the narrow Republican majorities in the House and Senate, leaders need almost every lawmaker on board in the face of essentially unified opposition from Democrats. Senate Democratic leader Chuck Schumer of New York said Republicans dropped the bill "in the dead of night" and are rushing to finish the bill before the public fully knows what's in it. He is expected to call for a full reading of the text in the Senate, which would take hours. Make-or-break moment for GOP The weekend session could be a make-or-break moment for Trump's party, which has invested much of its political capital on his signature domestic policy plan. Trump is pushing Congress to wrap it up, even as he sometimes gives mixed signals, allowing for more time. At recent events at the White House, including Friday, Trump has admonished the "grandstanders" among GOP holdouts to fall in line. The legislation is an ambitious but complicated series of GOP priorities. At its core, it would make permanent many of the tax breaks from Trump's first term that would otherwise expire by year's end if Congress fails to act, resulting in a potential tax increase on Americans. The bill would add new breaks, including no taxes on tips, and commit $350 billion to national security, including for Trump's mass deportation agenda. But the cutbacks to Medicaid, food stamps and green energy investments, which a top Democrat, Sen. Ron Wyden of Oregon said would be a "death sentence" for America's wind and solar industries, are also causing dissent within GOP ranks. The Republicans are relying on the reductions to offset the lost tax revenues but some lawmakers say the cuts go too far, particularly for people receiving health care through Medicaid. Meanwhile, conservatives, worried about the nation's debt, are pushing for steeper cuts. Sen. Thom Tillis, R-N.C., who said he spoke with Trump late Friday explaining his concerns, announced Saturday he cannot support the package as is, largely because of the changes to health care that he said would force his state to "make painful decisions like eliminating Medicaid coverage for hundreds of thousands." Sen. Rand Paul of Kentucky has been opposed to the bill's provision to raise the nation's debt limit by $5 trillion. And GOP Sen. Tim Sheehy of Montana said he would agree to proceeding only after being assured a provision for public lands sales he opposes would be taken out with an amendment. After setbacks, Republicans revise some proposals The release of that draft had been delayed as the Senate parliamentarian reviewed the bill to ensure it complied with the chamber's strict "Byrd Rule," named for the late Sen. Robert C. Byrd, It largely bars policy matters from inclusion in budget bills unless a provision can get 60 votes to overcome objections. That would be a tall order in a Senate with a 53-47 GOP edge and Democrats unified against Trump's bill. Republicans suffered a series of setbacks after several proposals, including shifting food stamp costs from the federal government to the states or gutting the funding structure of the Consumer Financial Protection Bureau, were deemed out of compliance with the rules. But over the past days, Republicans have quickly revised those proposals and reinstated them. The final text includes a proposal for cuts to the Medicaid provider tax that had run into parliamentary hurdles and objections from several senators worried about the fate of rural hospitals. The new version extends the start date for those cuts and establishes a $25 billion fund to aid rural hospitals and providers. The nonpartisan Congressional Budget Office has said that under the House-passed version of the bill, some 10.9 million more people would go without health care and at least 3 million fewer would qualify for food aid. The CBO has not yet publicly assessed the Senate draft, which proposes steeper reductions. Top income-earners would see about a $12,000 tax cut under the House bill, while the package would cost the poorest Americans $1,600, the CBO said. SALT dispute shakes things up The Senate included a compromise over the so-called SALT provision, a deduction for state and local taxes that has been a top priority of lawmakers from New York and other high-tax states, but the issue remains unsettled. The current SALT cap is $10,000 a year, and a handful of Republicans wanted to boost it to $40,000 a year. The final draft includes a $40,000 cap, but limits it for five years. Many Republican senators say that is still too generous. At least one House GOP holdout, Rep. Nick LaLota of New York, had said that would be insufficient. Trump's deadline nears House Speaker Mike Johnson, who sent his colleagues home for the weekend with plans to be on call to return to Washington. But as the Senate draft was revealed, House GOP support was uncertain. One Republican, Rep. David Valadao of California, said he was opposed.
The Mainichi
3 hours ago
- The Mainichi
Israel envoy to attend Nagasaki A-bomb ceremony after 2024 snub
TOKYO (Kyodo) -- Israel will attend the peace ceremony marking the anniversary of the 1945 U.S. atomic bombing of Nagasaki in August, the country's ambassador has said, after the Middle Eastern nation was not invited last year. Ambassador of Israel to Japan Gilad Cohen revealed he had received an invitation from the mayor of Nagasaki during a press conference Friday. He said he will show Israel's "respect to the Japanese people" and "mutual understanding of the importance of peace." It comes after the Nagasaki city government did not invite Israel in 2024 amid its conflict with Palestinian militants in Gaza. In response, ambassadors from the Group of Seven nations other than Japan pulled out of the annual ceremony. For this year's event, marking 80 years since the bombing, the city government said in May it intends to adopt a more inclusive approach inviting representatives from all the diplomatic missions in Japan. On Thursday, Russian media said Russian Ambassador to Japan Nikolay Nozdrev will attend the ceremony, the first presence from the country since it began its full-scale invasion of Ukraine in 2022.
Yomiuri Shimbun
5 hours ago
- Yomiuri Shimbun
Trump Says He Will Move Aggressively to Undo Nationwide Blocks on His Agenda
An emboldened Trump administration plans to aggressively challenge blocks on the president's top priorities, from immigration to education, following a major Supreme Court ruling that limits the power of federal judges to issue nationwide injunctions. Government attorneys will press judges to pare back the dozens of sweeping rulings thwarting the president's agenda 'as soon as possible,' said a White House official who spoke on the condition of anonymity to describe internal deliberations. Priorities for the administration include injunctions related to the Education Department and the U.S. DOGE Service, as well as an order halting the dismantling of the U.S. Agency for International Development (USAID), the official said, detailing efforts to implement plans President Donald Trump announced Friday. 'Thanks to this decision, we can now promptly file to proceed with numerous policies that have been wrongly enjoined on a nationwide basis,' Trump said at a news conference, during which he thanked by name members of the conservative high court majority he helped build. Trump on Friday cast the narrowing of judicial power as a consequential, needed correction in his battle with a court system that has restrained his authority. Scholars and plaintiffs in the lawsuits over Trump's orders agreed that the high court ruling could profoundly reshape legal battles over executive power that have defined Trump's second term – even as other legal experts said the effects would be more muted. Some predicted it would embolden Trump to push his expansive view of presidential power. 'The Supreme Court has fundamentally reset the relationship between the federal courts and the executive branch,' Notre Dame Law School professor Samuel Bray, who has studied nationwide injunctions, said in a statement. 'Since the Obama administration, almost every major presidential initiative has been frozen by federal district courts issuing 'universal injunctions.'' Nationwide injunctions put a freeze on an action until a court can make a decision on its legality. They have became a go-to tool for critics of presidential actions in recent times, sometimes delaying for years the implementation of an executive order the court ultimately approves. Experts said the Supreme Court's ruling could make it more difficult and cumbersome to challenge executive actions. It could result in courts issuing a patchwork of rulings on presidential orders in different parts of the country. In the short term, the ruling is a setback for liberals who have gone to court to thwart Trump. But the decision could also ultimately constrain conservatives seeking broad rulings to rein in a future Democratic president. Trump undertook a flurry of executive actions in the opening month of his term that ranged from dismantling government agencies to seeking the end of birthright citizenship. There have been more than 300 lawsuits seeking to block his executive actions. Federal district judges have issued roughly 50 rulings to date, temporarily holding up the administration's moves to cut foreign aid, conduct mass layoffs and fire probationary employees, terminate legal representation for young migrants, ban birthright citizenship, and more nationwide. Some of those rulings have been stayed by higher courts. The Supreme Court found Friday that federal district courts must limit their injunctions to the parties bringing the case, which could be individuals, organizations or states. They had previously been able to issue injunctions that applied to people not directly involved in cases. The ruling came as part of a case challenging Trump's ban on birthright citizenship. The court did not rule on the constitutionality of that executive order. The justices left it to lower courts to determine whether a nationwide injunction might be a proper form of relief for states in some cases, like the ban on birthright citizenship, where the harm could be widespread. The court also did not forestall plaintiffs from seeking nationwide relief through class-action lawsuits. Smita Ghosh, a senior appellate counsel with the Constitutional Accountability Center, a progressive public interest law firm, said the ruling could be a blow to plaintiffs seeking to stymie Trump's executive orders. The CAC has filed a friend-of-the-court brief on behalf of plaintiffs challenging the birthright citizenship ban. 'This approach will make it more difficult and more time-consuming to challenge unconstitutional executive practices, limiting courts' abilities to constrain unlawful presidential action at a time when many believe that they need it most,' Ghosh said. Many groups will pivot to filing class-action lawsuits to sidestep the ruling, she predicted, as some plaintiffs in the birthright citizenship lawsuit sought to do Friday. Such lawsuits allow individuals or groups to sue on behalf of a larger class of individuals who have suffered a similar harm from a government policy. It's likely courts will see more and more class- or mass-action lawsuits from cities, counties and states that realize they can no longer rely on litigation brought by others to advocate for their interests, said Jonathan Miller, chief program officer for the Public Rights Project, which is challenging several Trump policies. 'I think this decision will be perceived by this administration as a green light to more aggressively pursue its agenda, be bolder when it comes to compliance with injunction and its willingness to test the limits of the judiciary,' Miller said. Not everyone expected the ruling to have broad impacts. Skye Perryman, president and CEO of Democracy Forward, which has filed numerous challenges against Trump's agenda, called it a 'limited ruling' and said the court left open a number of routes for challenges against executive actions that could result in broad blocks on Trump's policies. Ed Whelan, a conservative attorney, was likewise skeptical. He wrote in a newsletter that 'the ruling is probably going to accomplish much less than many people celebrating it realize,' in part because plaintiffs would instead pursue more class-action lawsuits that would ultimately produce similar results as nationwide injunctions. The administration on Friday trumpeted the decision at the White House as a victory in its broader fight against the judiciary. Officials frequently deride judges who rule against the administration as activists and obstructionists. Dozens of judges appointed by presidents of both parties have temporarily paused many of Trump's efforts, and data shows threats against the judiciary have risen since he took office. 'Americans are getting what they voted for, no longer will we have rogue judges striking down President Trump's policies across the entire nation,' Attorney General Pam Bondi said, standing beside Trump at the news conference. She added, 'These lawless injunctions … turned district courts into the imperial judiciary.' Both Democratic and Republican presidents have complained about the blocks, said Jesse Panuccio, a partner at the Boies Schiller Flexner law firm and a Justice Department official in the first Trump administration. 'I think the ruling is seismic for how the federal district courts have been doing business in the last 20 years or so because the universal injunction has become a fairly standard and – in my view – unlawful remedy in cases,' Panuccio said.
