The US has questioned the implementation of the OECD's global tax treaty
Planet Volumes
Finance Minister Gilles Roth has submitted a response to Laurent Mosar's parliamentary enquiry into the changing US position on the OECD global tax treaty.
On 20 January 2025, the White House issued a memorandum clarifying that the OECD's "global tax treaty" is not enforceable in the US without congressional approval. This document also instructs the US Treasury Department to examine whether individual countries violate US tax treaties and impose discriminatory regulations against US companies. Washington is considering sanctions against countries found guilty of such violations.
The Luxembourg Finance Minister recalled that in 2021 the US supported the OECD agreement on a minimum tax for multinationals (the so-called "Pilot 2"). This was later used as the basis for EU Directive 2022/2523, which obliged EU countries to implement an effective minimum tax rate of 15 per cent. Luxembourg approved these rules by a law of 22 December 2023.
Gilles Roth emphasised that respecting the level playing field was a key element of the agreement. If the US refused to honour its commitments, it could jeopardise the balance of tax competition. Any new negotiations should take into account the European legal framework and the need to maintain a level playing field for all countries.
For the time being, Luxembourg remains committed to EU norms and will continue to apply the 15% rate despite the uncertainty surrounding the US position.
