While US President Donald Trump announced his country’s withdrawal from the international reform of the corporate minimum tax (see EUROPE 13493/21) on Monday 20 January, European policymakers are feeling the blow and staying the course.
Questioned at the Ecofin Council press conference on Tuesday 21 January, the European Commissioner for Economy, Valdis Dombrovskis, regretted the content of the memorandum. “We remain committed to our international obligations undertaken over the last years and open to meaningful dialogue with our international partners”, he said. “We trust that it's worth taking the time to discuss these matters with a new US tax administration in order to better understand their asks and explain also our position”, he added.
He explained that with US domestic tax reform expected by the end of the year, “there will be opportunity to engage constructively with the new US administration on various international tax issues from which both sides can derive benefits”. He noted that the US Treasury Secretary has 60 days to present President Trump with findings and recommendations regarding other countries’ compliance with tax treaties with the US and the impact on US businesses.
For his part, Pasquale Tridico (The Left, Italian), MEP for the M5S and Chair of the European Parliament’s Subcommittee on Tax Matters, described the decision as a “significant setback”. “Trump’s threats of retaliation should not deter us”, he said in a statement. “Our duty is to serve the citizens and European companies, who are heavily penalised by tax evasion practices of large multinationals, particularly tech giants”, he continued.
Lastly, Gabriel Zucman, economist and director of the EU Tax Observatory, reacted in an op-ed published in Le Monde and The Guardian, arguing in favour of “interposition protectionism: a policy that would devitalise and reverse the forces of tax competition, inequality and climate chaos”. “Under the new rules of the global economic game, importing countries would apply their laws beyond their borders to tax large, under-taxed companies abroad and their billionaire owners”, he added.
To read the memorandum: https://aeur.eu/f/f5d (Original version in French by Anne Damiani)