The Group of Seven (G7) nations endorsed a U.S. proposal to exempt American companies from parts of the 2021 global corporate minimum tax agreement, according to a statement from Canada, the current G7 presidency. This decision, which scraps the U.S.’s Section 899 retaliatory tax, aims to stabilise the international tax system. Consequently, the move offers relief to businesses, particularly in the UK, while sparking discussions on tax fairness.
The G7’s ‘side-by-side’ system aligns with existing U.S. minimum tax laws, replacing Section 899, a retaliatory measure proposed in President Donald Trump’s tax bill, per Reuters. Trump’s January 2025 executive order withdrew the U.S. from the 2021 deal, negotiated by the Biden administration with 140 countries, citing burdens on American firms. The G7’s agreement mitigates tensions by recognising U.S. tax frameworks and fostering global stability.
JUST IN: 🇺🇸 The U.S. and other G-7 nations agree to tax deal creating “side-by-side” system that exempts U.S. companies from parts of current global framework. pic.twitter.com/Pia5zcWZ2d
— Whale Insider (@WhaleInsider) June 28, 2025UK Finance Minister Rachel Reeves welcomed the decision, highlighting that it offers “certainty and stability” for British firms concerned about higher taxes under Section 899. The removal of this clause, which posed a threat to foreign companies operating in the U.S., alleviates the concerns expressed by UK businesses. Reeves also emphasised the importance of taking further action to address aggressive tax planning, indicating that ongoing reforms are necessary.
The G7’s support reflects a compromise to balance U.S. interests with international tax cooperation. Discussions continue to ensure the solution is “acceptable and implementable,” with officials aiming to curb tax avoidance.
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The G7’s decision has the potential to transform international tax policies, especially with the U.S. leading the way on exemptions. While this new framework may provide businesses with short-term relief, achieving long-term tax fairness will still pose significant challenges. The success of this agreement will depend on collaborative efforts to ensure stability while effectively tackling global tax avoidance.
