The G-7 agrees to exempt US multinationals from the global minimum tax.
The group gives in to Trump and reaches an agreement, arguing that they already pay taxes in the country, but the OECD will have the final say.
BarcelonaThe G-7, the group of the world's seven largest economies—made up of Germany, Canada, the United States, France, Italy, Japan, and the United Kingdom, with permanent representation from the European Union—announced this Saturday an agreement that exempts large US multinationals from paying the 15% minimum tax agreed upon with the OECD.
The pact was announced this week by US Treasury Secretary Scott Bessent, who welcomed the defense of his country's interests and, in return, asked Congress to eliminate the so-called 889 clause, which provided for retaliation. In fact, the agreement was reached based on the recently proposed changes to the US international tax regime in Donald Trump's mega-budget bill, which is still being debated in the Senate, as the G-7 stressed in a statement.
Bessent also asked US lawmakers to withdraw a measure from Donald Trump's "big, beautiful bill" that would have allowed the government to tax companies with owners outside the United States, as well as investors from countries that impose rates considered unfair on American companies. This provision, understood as a retaliatory measure, had raised concerns, as many believed it would prevent foreign companies from investing in the United States.
The decision, in the hands of the OECD
Instead of a minimum tax, US multinationals would be subject to a "juxtaposed system," the statement explains. This, according to the statement, would facilitate "progress aimed at stabilizing the international tax system" and "preserving the tax sovereignty of all countries."
Nearly 140 countries reached an agreement on the taxation of multinationals in 2021, negotiated under the auspices of the OECD. This agreement, criticized by Donald Trump, includes two pillars; one of them establishes a global minimum tax rate of 15%.
Now, the OECD will decide whether or not to exempt US companies from paying this tax. "We hope to quickly achieve a solution that is acceptable and applicable to all," G-7 officials assured in their statement.