EU | US | OECD BEPS
January 23, 2025
EU Criticizes Trump Administration’s Withdrawal from Global Tax Deal
Highlighting the need for fair taxation and advancing climate initiatives at the Davos World Economic Forum
EU Economy Commissioner Valdis Dombrovskis | by Valdības māja
The European Union has expressed deep regret over US President Donald Trump’s decision to withdraw from a landmark OECD driven Global Tax Deal. Speaking on Tuesday, EU Economy Commissioner Valdis Dombrovskis reiterated the EU’s commitment to global tax reforms, despite the setback.
“The commission regrets the content of the [executive] memorandum,” Dombrovskis said, referring to the Trump administration's decision to exit the deal. He emphasized the importance of maintaining dialogue, stating, “We trust that it is worth taking the time to discuss these matters with the new US tax administration in order to better understand their asks and explain our position.”
Speaking to CNBC on January 22, Dombrovskis highlighted concerns that Trump’s decision could embolden tax havens to divert funds away from larger economies. Under the OECD-brokered agreement, a minimum global tax rate of 15 percent was set—a figure higher than the rates imposed by some jurisdictions in Europe.
“The US was very much behind this global tax deal and was instrumental in facilitating its adoption,” Dombrovskis noted on the sidelines of the World Economic Forum in Davos. “There are common interests for the US, the EU, and the global community to ensure that multinationals pay their fair share of taxes and do not hide profits in offshore jurisdictions.”
Dombrovskis also acknowledged the need to explore alternative measures with the US to prevent corporate taxes from vanishing into offshore tax havens, a concern echoed by EU nation-state leaders.
Meanwhile, the EU Commissioner responsible for Taxation, Wopke Hoekstra, expressed broader concerns over US policy shifts, particularly regarding climate action. Speaking to CNBC at the World Economic Forum, Hoekstra addressed airline taxes and emphasized the need for a comprehensive approach to combating climate change. “You have to do much more than that,” Hoekstra said, referring to airline taxation alone. “If there is money on the table, for example, through taxation, we need to channel it back into industry and innovation to create solutions that benefit both businesses and the climate.”
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