Lloyd’s has issued a statement applauding the removal of Section 899 from the Senate’s version of the Republication reconciliation bill, which would have could have led to substantial additional tax on the US income of non-US-domiciled businesses and individuals.
UK businesses had viewed Section 899 as hitting them with “retaliatory tax measures.”
“We are very grateful for the chancellor’s leadership, working with her G-7 Finance Minister colleagues, to secure the announcement from the United States Treasury and Congress that Section 899 has been removed from the reconciliation bill,” said Lloyd’s Chair Sir Charles Roxburgh, in a statement.
Read more: G7 Agrees to Avoid Higher Taxes for US and UK Companies
“This greatly supports not only Lloyd’s business in the United States but all British companies with interests in the United States and will enable international investment in the United States to serve domestic businesses and communities,” Roxburgh continued.
“Lloyd’s has been providing insurance capacity to support the economy of the United States — our largest market — for over a century, and we are pleased to continue to do so,” he said.
Now that Section 899 has been removed from the so-called “One Big Beautiful Bill Act” (OBBBA), the UK and G-7 can plot the path forward on global minimum tax and how to tackle aggressive tax planning and avoidance, without the backdrop of this new retaliation measure, according to a statement issued on June 28 by the UK Treasury and the Chancellor of Exchequer Rachel Reeves.
“I will always represent the best interests of British businesses on the world stage. Today’s agreement provides much-needed certainty and stability for those businesses after they had raised their concerns,” Reeves said.
“The G7 agrees there is work to be done in tackling aggressive tax planning and avoidance and ensuring a level-playing field. The right environment for this work to happen is without the prospect of retaliatory taxation hanging over these talks, so the removal of Section 899 is welcome,” she added.
Pillar 2, which aimed to create a global minimum corporate tax rate of 15%, is part of an OECD initiative to tackle multinational global tax avoidance. A two-pillar tax reform plan was agreed between members of the Organisation for Economic Cooperation and Development’s (OECD) in October 2021, which the US has not enacted.
“The US commitment to drop retaliatory tax measures proposed in the One Big Beautiful Bill removes a major source of uncertainty for UK-headquartered multinationals,” according to Rain Newton-Smith, chief executive, Confederation of British Industry, in the Treasury statement.
“The CBI has been clear – there are no winners in an economic standoff. Avoiding disruption to transatlantic investment, financial flows and jobs benefits both the US and UK economies,” Newton-Smith said. “Avoiding disruption to transatlantic investment, financial flows and jobs benefits both the US and UK economies.”
Newton-Smith noted, however, that “uncertainty remains around the bill’s final passage and other potential Congressional actions later down the line alongside the UK’s Digital Services Tax under scrutiny….”
“Looking ahead, global tax rules must now be rebalanced through multilateral agreement while ensuring UK companies remain competitively positioned. This is a pivotal opportunity for the OECD to deliver a genuinely simpler, fairer regime – one that goes much further in reducing excessive compliance burdens and upholds a level playing field for all,” she added.
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