G7 agrees to exempt U.S. multinationals from global minimum tax

The Group of Seven (G7) nations have agreed to exempt U.S. multinational companies from a global minimum tax imposed by other countries, marking a significant victory for President Donald Trump’s government.

This deal, announced on June 28, 2025, would allow U.S. companies to benefit from a “side-by-side” tax solution, where they’ll only be taxed at home on both domestic and foreign profits.

The G7 nations have agreed to exempt U.S. multinational companies from the 15 per cent global minimum corporate tax established under the OECD’s Pillar Two framework.

 U.S. companies will be taxed solely in the United States, providing greater stability and certainty in the international tax system.

The exemption still required approval from the Organization for Economic Co-operation and Development (OECD), which negotiated the global tax deal among nearly 140 countries in 2021.

 U.S. Treasury Secretary Scott Bessent has asked lawmakers to remove the “revenge tax” provision, Section 899, from Trump’s policy mega-bill, which would impose levies on firms with foreign owners and investors from countries with unfair tax practices.

The exemption is expected to reduce the overall revenue gains anticipated from the global minimum tax, potentially undermining the system’s effectiveness in curbing tax avoidance globally.

The deal may give US companies a competitive edge, but it also raises questions about the fairness and equity of the global tax system.

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