G7 Agrees to Exempt US Multinationals from Global Minimum Tax
The Group of Seven nations reach a compromise allowing American companies to avoid the global minimum tax.
The Group of Seven (G7) countries announced on Saturday that they have reached an agreement to exempt U.S. multinational corporations from a global minimum tax imposed by other nations.
This decision comes as a result of intense negotiations, particularly driven by President Donald Trump's administration, which advocated for this compromise.
According to the G7 statement released by Canada, which currently holds the rotating presidency of the group, the agreement will implement a 'side-by-side' solution.
Under this system, U.S. companies will only be taxed domestically on both their local and foreign profits.
The deal is contingent upon recent changes proposed in the U.S. international tax system, as outlined in Trump's signature domestic policy bill that remains under debate in Congress.
The G7 highlighted that this side-by-side approach could provide greater stability and certainty within the international tax framework moving forward.
This agreement follows an OECD initiative involving nearly 140 countries that reached a deal in 2021 to tax multinational corporations.
The OECD's proposal consists of two pillars, including the second pillar, which sets a minimum global tax rate of 15 percent.
The G7 emphasized their expectation for the OECD to swiftly find a solution acceptable and implementable to all parties involved.
Earlier this week, U.S. Treasury Secretary Scott Bessent signaled that a mutual understanding among G7 countries defending American interests was underway.
He also urged U.S. lawmakers to remove Section 899 from consideration in Trump's policy mega-bill, which could have allowed the government to impose levies on foreign-owned firms and investors deemed to impose unfair taxes on U.S. businesses.
The controversial clause had raised concerns about deterring foreign investment in the United States.
This decision comes as a result of intense negotiations, particularly driven by President Donald Trump's administration, which advocated for this compromise.
According to the G7 statement released by Canada, which currently holds the rotating presidency of the group, the agreement will implement a 'side-by-side' solution.
Under this system, U.S. companies will only be taxed domestically on both their local and foreign profits.
The deal is contingent upon recent changes proposed in the U.S. international tax system, as outlined in Trump's signature domestic policy bill that remains under debate in Congress.
The G7 highlighted that this side-by-side approach could provide greater stability and certainty within the international tax framework moving forward.
This agreement follows an OECD initiative involving nearly 140 countries that reached a deal in 2021 to tax multinational corporations.
The OECD's proposal consists of two pillars, including the second pillar, which sets a minimum global tax rate of 15 percent.
The G7 emphasized their expectation for the OECD to swiftly find a solution acceptable and implementable to all parties involved.
Earlier this week, U.S. Treasury Secretary Scott Bessent signaled that a mutual understanding among G7 countries defending American interests was underway.
He also urged U.S. lawmakers to remove Section 899 from consideration in Trump's policy mega-bill, which could have allowed the government to impose levies on foreign-owned firms and investors deemed to impose unfair taxes on U.S. businesses.
The controversial clause had raised concerns about deterring foreign investment in the United States.
