The Group of Seven nations have agreed to exempt US multinational corporations from a global minimum tax, effectively carving out American companies from an international framework designed to prevent corporate tax avoidance, according to an announcement Thursday by US Treasury Secretary Scott Bessent.
The agreement shields US firms from the 15% global minimum corporate tax established under the OECD's Pillar Two framework, which was adopted by nearly 140 countries in 2021 and implemented across the European Union, United Kingdom, Canada and Japan in 2024.
"After months of productive dialogue with other countries on the OECD Global Tax Deal, we will announce a joint understanding among G7 countries that defends American interests," Bessent wrote on social media12. "OECD Pillar 2 taxes will not apply to US companies."
House Ways and Means Chairman Jason Smith called the agreement "an America First victory," saying it protects US tax sovereignty and prevents what Republicans characterized as a "global tax surrender" by the previous Biden administration3. In exchange for the exemption, the US will remove a proposed retaliatory tax provision known as Section 899 from pending legislation45.
The Tax Justice Network condemned the agreement as a "hasty cave-in" that would "finally pronounce global tax deal dead." Markus Meinzer, the organization's policy director, said the exemption would "make the tax deal entirely useless" by creating "a US-sized hole" in the global framework1.
According to Le Monde, the agreement strips "much of the substance" from the global minimum tax by allowing the world's largest economy to opt out while other G7 countries remain bound by the rules2.
The 2021 OECD agreement aimed to end the "race to the bottom" in corporate taxation by establishing a 15% minimum rate for multinational corporations with revenues exceeding €750 million12. The framework was designed to prevent companies from shifting profits to low-tax jurisdictions.
The exemption represents a retreat from international tax cooperation that began gaining momentum during the Biden administration. Trump had previously opposed the global tax framework, calling it unfair to American businesses3.
The agreement will now be implemented across the broader OECD-G20 Inclusive Framework "in the coming months," according to Bessent4, though the carve-out for US companies threatens to undermine the system's effectiveness in curbing tax avoidance globally.
