Shares of major U.S. tech giants experienced a slight dip in premarket trading after the Group of Seven (G7) advanced economies reached a landmark global minimum corporate tax deal. The deal, agreed upon on Saturday, aims to establish a minimum global corporate tax rate of at least 15%. This news resulted in minor declines in the shares of Facebook, Amazon.com, Apple, Microsoft, and Google-parent Alphabet, with decreases ranging from 0.1% to 0.5%. Europe’s tech stocks index also saw a 0.2% drop during early trading.

Experts, however, believe that the immediate market impact of the tax deal will be minimal. Ian Williams, an economics and strategy research analyst at Peel Hunt, pointed out that none of the G7 nations currently charge a tax rate as low as 15%, and the agreement requires substantial work, including gaining agreement from several smaller countries. The focus has now shifted to the G20 countries to seek a broader consensus on the proposed tax measures.

The G7’s tax proposals primarily target technology companies that provide remote services and attribute a significant portion of their profits to intellectual property held in low-tax jurisdictions. The aim is to ensure that these companies pay their fair share of taxes and prevent the shifting of profits to countries with lower tax rates.

Although the market response to the G7 tax deal seemed relatively muted, the long-term effects and implications of the agreement remain uncertain. Investors and industry experts will be closely watching as the G20 countries deliberate on the implementation of these new tax measures. The success of the global minimum corporate tax rate will ultimately depend on widespread adoption and cooperation among nations to combat tax evasion and establish a level playing field for businesses worldwide.

Useful links:
Bloomberg: U.S. Tech Futures Slide After G-7 Tax Deal Boosts Hopes for Solaris2 Update
Reuters: G7 tax deal spurs caution, will bring profits back home