In a major win for U.S. and U.K. multinationals, the Group of Seven (G7) nations have agreed to exempt American and British companies from some of the higher taxes tied to the 2021 global corporate minimum tax deal. The decision was confirmed Saturday in a statement from Canada, which currently holds the rotating G7 presidency.

The change follows President Donald Trump's successful push to remove Section 899 from his administration’s new tax and spending bill—a controversial retaliatory tax measure that had stirred international concern. In exchange, G7 finance ministers agreed to a so-called “side-by-side” system that allows countries to coexist under different tax rules, so long as certain base erosion protections are still met.

The U.S. had signaled it would walk away from the 2021 global corporate minimum tax deal, a signature achievement of the Biden administration. That agreement—negotiated by nearly 140 countries under the OECD’s Inclusive Framework—set a 15% minimum tax for large multinational companies in an effort to prevent tax base erosion and profit shifting (BEPS).

But Trump, earlier this year, issued an executive order pulling the U.S. out of the deal, claiming it unfairly targeted American firms and limited U.S. tax sovereignty. He had threatened to slap retaliatory taxes on countries enforcing the 2021 rules.

Now, with Section 899 officially scrapped in the Senate version of the tax bill, G7 countries have agreed to ease tax burdens on U.S. and U.K. businesses.

British companies, also facing uncertainty under Section 899, have now been spared additional taxes as well. Finance Minister Rachel Reeves welcomed the deal, calling it a win for economic stability:

However, she emphasized that more work remains to address aggressive tax planning and avoidance strategies.

The U.K. government echoed its commitment to reform, while also highlighting the need for realistic, business-friendly solutions.

While the agreement has brought temporary clarity, it also reveals growing fractures in the post-pandemic global tax regime. G7 officials stressed that discussions would continue to find a solution that’s “acceptable and implementable to all.”

Behind the scenes, some experts argue this development undermines the original intent of the OECD deal—to curb the race to the bottom in corporate taxation. By carving out exceptions for the world’s largest economies, critics say the G7 risks eroding the legitimacy of the global tax framework altogether. 🏦📉

An op-ed from a former finance official put it bluntly:
“The G7 is dead—time to move on to the G6.”

Section 899 was a retaliatory tax proposal buried deep within Trump’s broader fiscal plan. It would have hit companies from countries enforcing the global tax rules with additional levies, essentially punishing foreign businesses for following the OECD agreement.

European and Asian governments had voiced strong opposition to the measure, which they saw as undermining years of painstaking negotiation.

Now, with Section 899 off the table and exemptions in place, U.S. and U.K. firms can avoid overlapping tax burdens—at least for now.

Expect more turbulence in the global tax conversation.

📌 The OECD Inclusive Framework still involves over 130 countries, and any reworking of the 2021 agreement will require careful coordination.
📌 G7 finance ministers have pledged to work toward a deal that balances fairness with economic competitiveness.
📌 Meanwhile, businesses will be watching closely for how national tax authorities interpret and implement the new “side-by-side” framework.

For now, though, U.S. and U.K. companies just scored a major tax break—and President Trump chalks it up as another victory in his economic war against what he sees as unfair globalist rules. 🦅💼