The Group of Seven (G7) nations announced on Saturday that they have reached an agreement to exempt American multinational corporations from global minimum tax rules applied by other countries.
The move represents a significant diplomatic victory for US President Donald Trump, whose administration had lobbied vigorously for such a concession.
Under the arrangement, known as a “side-by-side” approach, US-based firms will be subject only to domestic taxation on both their American and overseas earnings, according to a statement issued by Canada, which currently holds the G7 presidency.
The compromise is partly in response to recent proposals aimed at overhauling the US international tax system, included in Trump’s flagship legislative agenda—still under debate in Congress.
The G7 noted that the new system could offer “greater stability and certainty” in the global tax landscape.
The broader initiative to enforce a global minimum corporate tax—agreed upon in 2021 by nearly 140 countries through the Organisation for Economic Co-operation and Development (OECD)—is designed to ensure that large companies pay at least 15% tax regardless of where they operate. Trump has been a long-standing critic of the plan.
Although the G7 has now endorsed the US exemption, it will ultimately be up to the OECD to determine whether to grant it.
The group said it hopes to “swiftly reach a workable and widely accepted solution.”
Earlier in the week, US Treasury Secretary Scott Bessent hinted at the breakthrough, referring to an emerging “joint understanding” within the G7 that would prioritise American economic interests.
Bessent also urged lawmakers to strike out Section 899 from Trump’s sweeping domestic policy package, often dubbed the “One Big, Beautiful Bill.”
The clause, nicknamed the “revenge tax,” would allow Washington to impose additional levies on companies with foreign owners or from countries seen to tax US firms unfairly.
Critics have warned that such measures could deter foreign investment in the United States.
