LONDON (Chatnewstv.com) — The Group of Seven advanced economies have reached an agreement to advance global minimum tax rules, offering British businesses much-needed certainty and helping avert a potentially damaging tax hit from U.S. legislation, the UK Treasury announced Saturday.
The deal paves the way for coordinated implementation of Pillar 2 of the OECD’s global tax reform agenda while addressing concerns raised by the United States about how its domestic tax system interacts with international rules.
One major outcome is the removal of Section 899 from the U.S. “One Big Beautiful Bill,” a proposed measure that could have imposed substantial additional taxes on UK-headquartered multinationals. Chancellor of the Exchequer Rachel Reeves said she acted swiftly after UK businesses voiced alarm over the provision.
“I will always represent the best interests of British businesses on the world stage,” Reeves said. “Today’s agreement provides much-needed certainty and stability… The right environment for this work to happen is without the prospect of retaliatory taxation hanging over these talks.”
The G7 agreement seeks to uphold the core goal of the global minimum tax—combatting base erosion and profit shifting by multinationals—while promoting fairness and global tax stability. It also opens the door for continued dialogue between G7 and other nations within the OECD/G20 Inclusive Framework, a coalition of more than 140 countries.
Under Pillar 2, countries agree to impose a minimum effective corporate tax rate of 15% on large multinationals, regardless of where they operate. Recent tensions arose over how the U.S. minimum tax would coexist with Pillar 2 rules. The new G7 consensus allows for parallel operation of both systems, while steps will be taken to prevent harmful tax competition or loopholes.
Rain Newton-Smith, Chief Executive of the Confederation of British Industry (CBI), welcomed the breakthrough.
“The U.S. commitment to drop retaliatory tax measures removes a major source of uncertainty for UK-headquartered multinationals,” Newton-Smith said. “Avoiding disruption to transatlantic investment, financial flows and jobs benefits both the U.S. and UK economies.”
The G7—comprising Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States—now plans to bring the agreed framework into broader multilateral negotiations at the OECD. Officials emphasized that the progress hinges on the continued withdrawal of any retaliatory tax proposals.
The Treasury said the latest development aligns with the UK’s broader Plan for Change and recent trade initiatives, including deals with India, the European Union, and the United States.
Talks will continue among G7 members and the OECD Inclusive Framework in the coming months as countries work toward final implementation of global tax rules designed to ensure multinationals pay their fair share.
Editor: Gabriel Ani
