GERMANY: Berlin Says Still Backs Global Minimum Tax For Multinationals

Germany still supports an agreement to impose a 15-percent global minimum tax on multinational companies’ profits despite an exemption agreed for US multinationals, Finance Minister Lars Klingbeil said Wednesday.

G7 nations last month agreed to exempt the US firms because they are already taxed in the United States — a win for President Donald Trump’s government, which had pushed hard for the compromise.

German press reports Tuesday said that Chancellor Friedrich Merz had voiced deep scepticism over whether the international tax project had a future.

But Klingbeil, asked about those reports, said Berlin remained committed to the agreement, negotiated over more than 10 years through the Organisation for Economic Co-operation and Development (OECD).

“The chancellor and I agree that we are committed to this global minimum tax and that we will do everything to maintain this project,” Klingbeil told a press conference with his French counterpart Eric Lombard near Berlin.

Nearly 140 countries struck a deal in 2021 to tax multinationals, an agreement that includes two “pillars”.

The first aims to make multinationals, particularly in the digital sector, pay taxes in the countries where their customers are located. The second sets the minimum rate at 15 percent of profits.

Trump, after returning to power this year, withdrew the United States from the agreement and threatened retaliation against any country that applied Pillar 1 to American companies.

Pillar 2 is applied by some 60 countries including Brazil, Britain, Canada, Japan, Switzerland and members of the European Union.