Late last week, US lawmakers took the axe to the controversial Section 899 of the ruling Republican government’s sweeping tax bill.

The widely dubbed “revenge tax“ would have levied up to a 20 per cent tax on investors from countries that “discriminated” against the US.

The measure sought to target the 15 per cent global minimum tax promulgated by the Organisation for Economic Co-operation and Development, from which emerged Bermuda’s corporate income tax regime.

Although Bermuda was not a party to the specific section — initially involving the undertaxed profits rule from OECD’s Pillar 2 and digital services taxes — that is offensive to the US, there were questions as to what would be left of the promised $750 million a year in Bermuda corporate income tax revenue after a transatlantic tax war.

With “war” now averted, the US Treasury Secretary Scott Bessent asked congressional Republicans to scrap the offending portion from their versions of Donald Trump’s sweeping tax bill.

Mr Bessent said the provision was no longer necessary after the G7 members — Canada, France, Germany, Italy, Japan, Britain and the US — agreed to measures that defended American interests.

At issue was the OECD Pillar 2, the global minimum tax agreement that the US, although a party to, had refused to implement.

Mr Bessent said on X: “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.

“I want to thank my G7 counterparts for their partnership and collaboration towards achieving this historic outcome.”

Section 899 was controversial from the start, advancing an ill-defined policy that targeted not just thought-to-be offending countries, but their citizens and corporations.

But even US trade organisations offered up concerns for unintended consequences from a tool designed to rework tax relationships with Americas trade partners.

Many felt it would have slowed foreign direct investment and hurt Mr Trump's efforts to drive new foreign investments into domestic manufacturing.

A G7 statement on Saturday confirmed the plan to treat the US separately: “Delivery of a side-by-side system will facilitate further progress to stabilise the international tax system, including a constructive dialogue on the taxation of the digital economy and on preserving the tax sovereignty of all countries.

“We recognise that these issues have relevance to a wider group of jurisdictions and look forward to discussing and developing this understanding, and the principles upon which it is based, within the Inclusive Framework with a view to expeditiously reaching a solution that is acceptable and implementable to all.”

A statement by Mathias Cormann, the OECD Secretary-General, on G7 progress on international tax co-operation welcomed the “breakthrough statement by the G7”, setting out a proposed way forward for the operation of global minimum tax arrangements.

• For more on the statement by Mathias Cormann, see Related Media

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Statement by the OECD Secretary-General on G7 Progress on International Tax Co-operation.pdf