G7 strikes deal to exempt US multinationals from higher global minimum tax

UPDATED: Jun 29, 2025 06:56 IST

The Group of Seven (G7) nations have agreed to exempt US multinational corporations from additional global minimum taxes imposed by other countries. The deal, announced on June 28, helps settle differences over how international tax rules should apply and is seen as a win for President Donald Trump’s administration, which strongly supported the change.

Under the agreement, US firms will benefit from a “side-by-side” framework in which they are taxed solely under the US minimum tax system, on both domestic and foreign income, without facing duplicative levies abroad.

The G7 said the move aims to ensure "provide greater stability and certainty in the international tax system moving forward”, following concerns raised by US officials and corporations.

The breakthrough was facilitated in part by “recently proposed changes to the US international tax system,” included in Trump’s still-debated “One Big Beautiful Bill.”

One of the most controversial elements– Section 899, dubbed a “revenge tax” targeting foreign-owned firms, has now been withdrawn, following calls from the US Treasury Secretary Scott Bessent and pressure from international partners.

The clause had alarmed close allies, especially the UK, as it threatened significant additional tax burdens on British businesses with US operations. Its removal has been welcomed in London as a necessary step toward maintaining a cooperative global tax framework.

UK Chancellor of the Exchequer Rachel Reeves said: “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. The G7 agrees there is work to be done in tackling aggressive tax planning and ensuring a level playing field. The removal of Section 899 eliminates a key obstacle to that progress.”

The G7 said the deal would offer greater certainty for international businesses and expressed hope for a broader agreement that all parties can implement effectively.

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