German Chancellor Friedrich Merz has urged the European Union to suspend implementation of a global minimum corporate tax, arguing the plan is no longer viable without US participation.
Speaking after a meeting atop the Zugspitze, Germany’s highest peak, Merz said continuing with the 15 per cent minimum tax in Europe would put the continent’s economy at a disadvantage.
“The Americans have withdrawn, and this concept no longer has a future,” Merz said, adding that the German government would now take up the issue.
The 15 per cent minimum tax is part of a global corporate tax reform endorsed by around 140 countries after years of talks. The aim is to ensure big companies pay a fairer share of tax.
The tax, which is at various stages of implementation depending on the country, hits multinational companies with annual revenues over $US871 million ($A1.3 billion), regardless of where their profits are generated.
The policy’s future was thrown into doubt after President Donald Trump declared it unenforceable in the United States.
Washington has argued the global agreement infringes on its fiscal sovereignty.
A recent G7 compromise allows US companies to be exempt from the global minimum tax as long as they remain subject to a domestic US tax regime.
Canada, which holds the G7 presidency, said the deal still represents progress in the fight against profit shifting and tax avoidance.
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