Fight against tax escape: Merz for suspension of global minimum tax in Europe

According to Chancellor Friedrich Merz, the global minimum tax for large corporations should be suspended in Europe. After a meeting with the Bavarian cabinet on the Zugspitze, the CDU leader said that he shares the assessment of Bavaria’s finance minister Albert Füracker (CSU). From the perspective of financial policy, he “did not promote this so -called minimum taxation in Europe because the Americans got out and this concept has no future anyway”. Merz announced that the Federal Government “now” will deal with this question in Berlin.

The minimum taxation is part of a global reform of corporate taxes that had joined around 140 states. According to this, all internationally operating companies with more than 750 million euros in annual sales must pay at least 15 percent taxes. The regulation is regardless of where the profits are created.

Füracker warns of the disadvantage of the European economy

“A minimum global tax can only fulfill its purpose if the most important global players participate in the economy. After the United States or the US companies are now excluded from the application, according to the G7 decision, the minimum tax in its current form makes no sense,” said Füracker of the German Press Agency. With a predominantly European implementation, the economy even threatens massive disadvantage, both in tax and bureaucratic terms. “The federal government must therefore be committed to the EU at least temporarily exposed to the EU minimum EU taxation directive.”

Trump had declared minimum tax ineffective

After taking office, US President Donald Trump declared the global minimum tax for large companies in the United States ineffective. The White House sees the global tax agreement as an inadmissible interference in national sovereignty over finance and taxes.

Since then, the G7 countries have been looking for a compromise with the USA. A recently found agreement stipulates that US companies are excluded from the global minimum tax, but are subject to tax liability in a parallel US system, as can be seen from a statement by the Canadian G7 presidency. It was agreed that the regulation proposed by Washington secure progress in the fight against international profit transfer.

Unlike Merz, Federal Minister of Finance Lars Klingbeil (SPD) welcomed the compromise: “The agreement of the G7 makes it possible for us to continue fighting against tax havens, tax escape and tax dumping.” The USA would no longer stand in the way of global minimum taxation, planned punitive measures against European companies are off the table. “This means that OECD and US light taxes can exist side by side.”