U.S. Treasury issues a G7 Statement on Global Minimum Tax

Jun 29, 2025

The U.S. makes the case for a 'side-by-side' system as a solution to Pillar 2

On June 28, 2025, the U.S. Treasury officially announced a “G7 Statement on Global Minimum Tax.”

This marks a significant development—and if the proposal advances under the broader OECD agreement, it would represent a favorable outcome for U.S.-parented multinational groups.

The statement reflects a shared understanding among the G7 in support of the “side-by-side” system proposed by the U.S. Under this approach, U.S.-parented groups would effectively be exempt from the Pillar 2 Income Inclusion Rule (IIR) and the Undertaxed Profits Rule (UTPR), with respect to both domestic and foreign profits. In parallel, the U.S. would work to address any gaps in the current tax system that may not fully align with Pillar 2 objectives, in order to achieve an effective minimum tax.

It appears that for the G7 and the broader OECD coalition to further consider and advance this proposal, Section 899 must not be enacted into law. Accordingly, Treasury Secretary Bessent has urged the Senate to remove this provision from the draft of the One Big Beautiful Bill Act.

Many questions remain—more to come.

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Disclaimer

The contents of this insight are intended for general information only. illumina CPA Group, Inc. is not, by means of this communication, rendering professional advice or services. Before making any decisions or taking any action that may affect your finances or your business, you should consult a qualified professional adviser.