In a move set to bring relief and clarity to businesses on both sides of the Atlantic, the United States and the Group of Seven (G7) nations have come together on a vital agreement to avoid imposing higher taxes on U.S. and UK companies.
This breakthrough, announced over the weekend from Canada — currently chairing the G7 — signals a more collaborative global tax environment. At the heart of the deal is a new “side-by-side” system that will shield U.S. companies from certain parts of an earlier global tax framework. In return, the U.S. has agreed to remove a controversial measure known as Section 899, which had been proposed during former President Donald Trump’s administration.
The decision is being widely seen as a step toward restoring stability in international tax systems. According to the U.S. Treasury Department, this approach balances existing American tax laws with global tax standards while preserving progress made by over 130 countries in curbing profit shifting and tax base erosion.
“This agreement reflects our shared desire to build a fairer and more stable tax system for the global economy,” the Treasury Department said in a statement posted on X (formerly Twitter). “We look forward to building on this foundation within the Inclusive Framework.”
The UK welcomed the news, too. For weeks, British businesses had voiced concern about potential financial pressure from increased tax obligations due to Section 899. The removal of the provision now provides welcome breathing room.
“This agreement brings the certainty and stability that British businesses have been calling for,” said UK Chancellor Rachel Reeves. “But we must keep pushing forward to close the loopholes that allow aggressive tax avoidance to continue.”
The G7 made it clear: this is not the end of the conversation. Officials stressed the importance of developing a solution that works for all nations involved — one that is fair, enforceable, and focused on long-term sustainability.
Earlier this year, former President Trump issued an executive order declaring that the U.S. would no longer participate in the 2021 global corporate minimum tax deal — a landmark agreement brokered under the Biden administration and supported by nearly 140 countries. He also threatened to introduce retaliatory taxes against countries that targeted U.S. firms under that deal, a move that had sparked global tensions.
With this new agreement, however, the tone seems to be shifting toward collaboration and compromise — a hopeful sign for global businesses navigating an ever-changing tax landscape.
