The “revenge tax” is dead but the fate of a global tax deal that took more than 40 years to achieve is now up in the air.

Earlier this month, the G7 countries – the US, Canada, France, Germany, Italy, Japan and the United Kingdom – announced a deal to exempt the US from the global minimum tax arrangements agreed by nearly 140 countries in 2021 after decades of discussions and a decade-and-a-half of detailed negotiations co-ordinated by the OECD.

US President Donald Trump has been a vocal critic of the global tax deal. Credit: AP

In exchange, the US will drop Section 899 of US President Donald Trump’s “One Big Beautiful Bill Act”, the so-called “revenge tax”, which would have enabled the US to impose retaliatory taxes of up to 20 per cent on companies and individuals from countries that have imposed “discriminatory” taxes on US companies.

The negotiated outcome creates what the parties described as a “side-by-side” system that excludes the US from the 15 per cent minimum global tax deal the Biden administration agreed to in 2021 and which was supposed to raise an extra $US150 billion ($230 billion) of annual global tax revenues.

That global tax regime was targeted at the biggest of multinational companies and was designed to shift some tax revenue from countries where the companies are legally located to where they actually operate and generate their revenue and profits.

The winners from that deal would be the wealthier countries with higher tax rates and the losers, tax havens, countries, like Ireland – with very low corporate tax rates designed to lure international head offices and revenue streams – and the 100 or so multinationals targeted by the........

© The Sydney Morning Herald