June 29, 2025 – The Group of Seven (G7) nations have officially agreed on the next steps for implementing the global minimum tax and Pillar 2 under the G20/OECD Inclusive Framework. The announcement, made by HM Treasury on Saturday, June 28, 2025, marks a major development in efforts to curb multinational tax avoidance and build a fairer international tax system.
A key part of the agreement, especially important for the UK, is the removal of Section 899 from the proposed "One Big Beautiful Bill" in the United States. This section had raised concerns that it could lead to significant retaliatory taxes on UK and other non-U.S. companies, potentially disrupting global trade and investment.
The Chancellor and G7 finance ministers have worked to address U.S. concerns about how the Pillar 2 rules would align with the U.S. minimum tax system. The new agreement aims to allow both systems to work side by side, while minimizing risks related to unfair competition and profit shifting.
The G7 — which includes Canada, France, Germany, Italy, Japan, the UK, and the U.S. — reaffirmed their commitment to ensuring that large multinational companies pay at least a 15% effective tax rate in every country they operate in. This is meant to stop companies from moving profits to low-tax countries, promote fairness, and boost tax revenues.
For UK businesses, removing Section 899 brings relief. Many had raised concerns with HM Treasury, warning that the proposal could create uncertainty and reduce foreign investment. The Chancellor, with support from U.S. Treasury Secretary Scott Bessent, played a key role in reaching this agreement.
Although the G7 has taken this important step, more discussions will follow within the wider group of 140+ countries under the G20/OECD framework. These talks will continue shaping the rules, with the understanding that removing U.S. proposals like Section 899 is crucial to making further progress.
This agreement represents a turning point in global tax reform and shows a shared commitment to updating tax systems for today’s global and digital economy.
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