G7 Agreement on Global Minimum Tax with Exemptions for the US

G7 agreement on global taxation of multinationals, with a striking exemption for US companies, represents a new victory for President Donald Trump.

The Canadian presidency of the G7, in a note, explains that an agreement has been reached for a "parallel solution" that, by virtue of the "fiscal sovereignty of the countries", exempts American companies from some parts of the new tax regime, based on the taxes they already pay in the USA.

The change risks overturning the 'global minimum tax' on which a historic agreement was reached in 2021 which aimed to put an end to the tax avoidance practices of multinationals: in particular US Big Tech.

The G7 declaration - which is not binding and will have to be approved by 147 countries at the OECD level - then explains that a "parallel" regime like the one torn by the US "will facilitate further progress in stabilizing the international tax system, including in a constructive dialogue on the taxation of the digital economy and on the defense of the fiscal sovereignty of all countries".

"The agreement formalized at the G7 on the global minimum tax is an honorable compromise found with the American administration that protects our companies from the automatic retaliations originally provided for by clause 899 of the Obbba (One Big Beautiful Bill Act) under consideration by the US Senate. We must continue to work in this direction and promote dialogue". Thus the Minister of Economy and Finance Giancarlo Giorgetti.

For the Trump administration, this is a success that will save US companies $100 billion in taxes abroad. Just yesterday, the American president had returned to threatening the European Union after having stopped negotiations with Canada. "With the digital tax, the EU will not come out of it well, like Canada," the president had warned in the Oval Office, accusing the Ottawa government of having acted "stupidly."