G7: G7 countries adopted agreement on global minimum tax

On 28 June 2025, the G7 countries announced an agreement supporting a side-by-side system under the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting Pillar 2. The agreement would exempt US-parented multinational groups from the Income Inclusion Rule (IIR) and Undertaxed Profits Rule (UTPR) in recognition of existing US minimum tax rules. The IIR requires the parent company of a multinational to pay a top-up tax on low-taxed income of its subsidiaries, and the UTPR allows other countries to collect tax if the IIR is not applied, ensuring the 15% minimum tax is met globally. The agreement will apply to large US-headquartered corporate groups engaged in cross-border economic activity and includes commitments to address any level playing field or base erosion risks. It will be developed alongside efforts to simplify the Pillar 2 compliance framework and reconsider the treatment of non-refundable tax credits.