Brussels against Apple, Google, Amazon and large American multinationals, on account of tax bill of large multinationals. Washington against Europe, on account of escalating statements by candidate Donald Trump, who have not ceased with President Donald Trump. And now, third episode: Again Europe against US for tax breaks that Trump administration prepares. The finance ministers of five major countries of Union (Germany, France, United Kingdom, Italy and Spain) have sent a letter to U.S. Treasury Secretary, Steven Veal Mnuchin, with several complaints about proposed tax remission of American executive. Washington risks disobeying international rules set by World Trade Organization (WTO). According to European ministers, Trump's plans violate "double taxation treaties," can lead to "serious distortions in international trade," can lead to erosion of taxable bases, and ultimately discriminate against companies European. Trump has already had opposition at home with se reforms, which, paradoxically, displeases some of his country's great fortunes. Europe now denounces that se measures violate international rules.
Europe has nothing to say about American fiscal sovereignty, according to sources consulted in Eurogroup. But you can denounce those tax breaks if you fail to comply with international regulations. The letter--to which this diary has had access--functions as a warning to navigators: "We welcome actions of United States in fight against fiscal erosion and tax evasion, but we have great concerns about various measures," The ministers write, among m Spaniard Cristóbal Montoro. Trump's fiscal proposals "could lead to distortions in international tax scheme as well as in trade and investment." Europe highlights cooperation that has been in this area in recent years. But union's main ministers are warning that such cooperation can be seriously damaged if various Trump administration plans do not take into account European warnings.
Ministers see three kinds of effects. On one hand, proposal to levy with a "excise duty" of 20% transactions of foreign subsidiaries, including imports of U.S. multinationals from ir factories abroad: those measures (with which Washington "He wants to end financial engineering that makes big companies not paying anywhere", "y could be inconsistent with double taxation agreements," which y pursue to prevent a company that is listed in a country to pay twice taxes. The heads of haciendas in large European countries believe that measure may not comply with WTO rules. Second, Europe complains about Senate's debate on erosion of tax bases: it could have an impact, according to ministers, on banks and European insurance companies, whose intragroup transactions would not benefit from deductions and pay a 10% tax. "That would seriously distort international financial markets," according to missive. Lastly, Europeans complain about anor law that Senate should approve that could have an impact on R D.
This fiscal battle is part of a low-intensity commercial war that, since great Crisis erupted, has had several chapters. The world's major central banks have used extraordinary monetary-policy measures with a view to currency exchange rates. There have been direct protectionist measures, both in Europe and in United States, against third countries like China in flagrant cases such as price of steel (or recently, in US, against European olives). This light protectionism now arrives via taxes: with tax breaks that favor US companies (in this case), to detriment of companies that do not have an American passport. "We hope it will take note of our concerns and we are confident that United States will create a solid, modern and balanced tax system," missive closes. But that is to be seen.