Major Pillar 2 development: G7 and US reach agreement on global minimum tax
Steve Davies · Posted on: June 30th 2025 · read
Following a joint statement from G7 countries released over the weekend, it appears that the US Government will remove Section 899 from the “One Big Beautiful Bill” in exchange for concessions provided by the other G7 territories on the OECD’s Pillar II Global Minimum Tax.
It appears that the Pillar 2 proposed amendments would involve the following:
- Exclude U.S. parented groups from the Income Inclusion Rule (IIR); and
- Exclude all US entities from the Undertaxed Profits Rule (UTPR).
It appears that a Qualified Domestic Minimum Top-up Tax (QDMTT) would remain in place in the respective territories, although careful consideration will need to be given to the updated rules that will be issued following the G7 statement. Hence a Pillar 2 compliance burden still exists for all Multinationals, though the amount of additional Top Up Tax will significantly reduce in many cases for US Groups.
These changes need to be agreed by other countries in the Inclusive Framework in addition to the G7 if they are to apply globally.
Our expert specialist concludes
"The updated proposals would mean that multinational groups would be spared from higher taxes following the removal of Section 899. This changes should also remove a major source of uncertainty for many non-US based multinationals.
At this stage, however, it appears that an IIR and UTPR would still apply to non US parented groups and non US companies."
Links to key recent announcements which provide further details can be found below:
Find out more about BEPS 2.0
For more information on the BEPS tax framework or other corporate international tax matters, please Contact Us, or email Chris Danes or Steve Davies from our International Tax team, who will be happy to assist:
Chris Danes, Tax Partner: [email protected]
Steve Davies, Corporate Tax Director: [email protected]
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