G7 reaches deal to shield US multinationals from global minimum tax

The Group of Seven (G7) nations has agreed to a deal that would exempt American multinational corporations from a global minimum tax, marking a significant policy win for the Trump administration, which had strongly advocated for the exception.

Under the agreement, US-based companies will be taxed solely by the United States on both their domestic and overseas earnings. This "side-by-side" arrangement, announced in a statement by Canada — which currently holds the G7 presidency — aims to offer greater certainty and stability in international taxation.

The G7 cited "recently proposed changes to the US international tax system" as a key factor in reaching the compromise. These changes are part of President Trump’s sweeping domestic policy bill, which is still under debate in Congress.

The global minimum tax framework, agreed upon by nearly 140 countries in 2021 through the Organisation for Economic Co-operation and Development (OECD), includes a 15% minimum tax rate on multinationals. Trump has repeatedly criticized the agreement, particularly its second pillar — the global minimum tax itself.

While the G7 has now signaled support for exempting US firms, the final decision rests with the OECD, which must approve any exception.

The group expressed optimism about reaching a solution that is "acceptable and implementable to all" in a timely manner.

Earlier this week, US Treasury Secretary Scott Bessent hinted at the deal, saying the G7 was close to a "joint understanding that defends American interests." He also urged Congress to remove Section 899 from Trump’s legislative package. That provision — nicknamed the "revenge tax" — targets foreign-owned firms and investors from countries seen as unfairly taxing US companies, raising concerns it could discourage foreign investment in the US.