Unprecedented. Seismic. World-changing. The finance chiefs of G7 countries reached for superlatives as they hailed Saturday’s corporate tax deal. After nearly a decade of talks, it is a remarkably bold plan. But expectations of a massive tax windfall are misplaced.

The accord has two components. One aims to address the race to the bottom on tax rates by imposing a global minimum corporation tax on large companies. The second component would require the largest, most profitable companies to pay more tax in countries where they make their sales. A fifth of their global profits above a 10 per cent profit margin would be reallocated in this way.

Chart showing that most big US groups have high margins. Top ten companies ranked by operating margin, against net income margin (%, for the last twelve months)  and market worth ($billion)

Big companies should be braced for higher tax bills. But how much? Some big numbers are doing the rounds. EU multinationals would have to pay about €50bn or 15 per cent more in taxes globally, according to the Paris-based EU Tax Observatory. Similarly, the UK would collect an extra £7.9bn, according to the IPPR think-tank.

Such estimates look overblown. Scaling up an earlier OECD estimate suggests extra revenues of less than 4 per cent or $84bn. The biggest share would be paid by tech giants and other US multinationals to the US. Weak anti-avoidance rules enabled them to move profits to tax havens more readily than companies based elsewhere. But getting the reforms past Congress may be tricky.

Most big US tech companies have steep enough margins for some extra tax to be payable overseas. Amazon, on the face of it, does not. Official pronouncements suggest it will be caught, even so. Its lucrative web services is a tempting target for tax authorities. The uncertainty is a sign that huge amounts of detail need to be filled in.

The tax plan should be seen as a grand bargain. In exchange for allowing greater taxation of US multinationals by other countries, Washington would get a widely applied global minimum tax rate. That would allow the US to maintain a relatively high its corporate tax rate without fear of being sharply undercut by other countries. It should also prompt the UK, Italy and others to drop their digital taxes. In return, the US would rescind its threat to impose tariffs.

The hype about this long-awaited deal will be justified if it averts a costly tax and trade war.