The Organisation for Economic Co-operation and Development has announced decisions among more than 145 countries and jurisdictions for a co-ordinated plan for a global minimum tax.

However, the so-called Inclusive Framework announcement was immediately pilloried by a United States group, the Financial Accountability and Corporate Transparency Coalition, which declared in a headline: “Under US pressure, OECD agrees to deal allowing continued tax abuse by big US corporations”.

Fact went on to explain that American-headquartered corporations will continue to be exempt from key elements of the OECD-negotiated global minimum tax regime, a development that the organisation says represents a regrettable setback for the global fight against corporate tax avoidance.

The organisation said today that among other changes, the plan “allows large US corporations to continue to benefit from the use of tax havens beyond what is permitted under the existing global minimum tax standard”.

According to Zorka Milin, Fact policy director: “This deal risks nearly a decade of global progress on corporate taxation only to allow the largest, most profitable American companies to keep parking profits in tax havens.

“The Trump Administration has chosen to prioritise maintaining rock-bottom taxes for big corporations to the detriment of ordinary Americans and our allies across the globe.”

International Tax Review wrote: “The controversial plan, which had been criticised by various countries, will see US-parented groups exempted from Pillar Two’s income inclusion rule and undertaxed profits rule.”

US Republicans have had objections to parts of the OECD initiative all along and several countries expressed concern about allowing the US to have its way. But many of those objections have fallen by the wayside, under the threat of possible retaliation from Washington, critics say.

A key part of the OECD/Group of 20 Base Erosion and Profit Shifting Project is addressing what the OECD calls the tax challenges arising from the digitalisation of the economy.

In 2021, more than 135 jurisdictions joined a groundbreaking plan to update key elements of the international tax system.

The Global Anti-Base Erosion Rules are a key part of the plan, ensuring large multinational enterprises pay a minimum level of tax on the income arising in each of the jurisdictions where they operate.

An OECD statement from Paris today said the countries and jurisdictions had worked together within the OECD/G20 Inclusive Framework on BEPS before agreeing on key elements of the agreed package.

The statement said: “Following months of intense negotiations, the comprehensive package for a ‘side-by-side’ arrangement announced today represents a significant political and technical agreement which will set the foundation for stability and certainty in the international tax system.

“It will preserve the gains achieved so far in the global minimum tax framework and protect the ability for all jurisdictions, particularly developing countries, to have first taxing rights over income generated in their jurisdictions.”

Mathias Cormann, OECD Secretary-General, described the agreement as “a landmark decision in international tax co-operation”.

He added that the Inclusive Framework members “are to be commended for their work in finalising this package, which enhances tax certainty, reduces complexity and protects tax bases.

“I look forward to seeing the IF take forward the implementation of this package, as well as to future proposals for further simplifications of the global minimum tax rules and compliance burdens.”

Politico said the carve-out of American multinationals from key Pillar Two provisions, was essentially because those companies are already subject to the minimum tax on foreign income that Republicans put into law in 2017.

Scott Bessent, US Treasury Secretary, called the agreement “an historic victory in preserving US sovereignty and protecting American workers and businesses from extraterritorial overreach”.

Yahoo! Finance said the most recent version of the deal waters down a landmark 2021 agreement that set a minimum global corporate tax of 15 per cent. The idea was to stop multinational corporations, including Apple and Nike, from using accounting and legal manoeuvres to shift earnings to low or no-tax havens, Yahoo! said, citing “typically places like Bermuda and the Cayman Islands, where the companies actually do little or no business”.

Bermuda is not a signatory to the global minimum tax initiative but has enacted its own domestic Corporate Income Tax regime that ensures that Bermuda-based multinational enterprises are subject to the 15 per cent minimum tax rate.

• The Bermuda Government reacted to the OECD statement tonight, with its own statement, which said: “We welcome the resolution of the side-by-side arrangement. We look forward to monitoring the implementation of this package, as well as to future proposals for further simplifications of the Global Minimum Tax rules and compliance burdens.

“We will continue to engage with the OECD and other stakeholders as we explore opportunities to provide substance-based tax incentives to Bermuda business in alignment with Global Minimum Tax rules, to grow and develop the economy for the benefit of all in the jurisdiction.”

• More information on the global minimum tax is available from the OECD