Ongoing Fight Against A 15 Percent Global Minimum Tax That Surrenders American Sovereignty, Erodes Global Competitiveness Advances To Court of Justice of the European Union
Washington D.C. – Today, the American Free Enterprise Chamber of Commerce (AmFree Chamber) landed a major victory in their lawsuit in the Belgian Constitutional Court challenging the European Union (EU) Undertaxed Profits Rule (UTPR) of Pillar 2. Based on the Organization for Economic Co-operation and Development (OECD) model rules, Pillar 2 allows foreign governments to impose a new 15 percent global minimum tax rate on certain U.S. companies with operations overseas.
Joined by four other trade organizations, AmFree Chamber challenged the Belgian legislation implementing the UTPR provisions, arguing these provisions infringe upon fundamental rights protected by the Belgian Constitution and primary EU law, including the right to property, the freedom to conduct a business, and the principles of equality, non-discrimination, legality, and fiscal territoriality. The parties also requested the Constitutional Court annul the national legislation.
Today’s ruling referred the case to Court of Justice of the European Union (CJEU), who typically issues a final ruling within 18 months.
“This represents the kind of strong advocacy that US businesses deserve and that AmFree was established to provide,” said William P. Barr, former two-time attorney general and honorary chairman of AmFree’s Center for Legal Action (CLA).
“Today’s news is a monumental step toward restoring America’s global competitiveness, and we are pleased that the matter is proceeding to the Court of Justice,” added Bill McGinley, President of CLA. “The United States should not yield to another country’s version of best accounting practices, and U.S. companies should never be forced to tell foreign jurisdictions what they have paid to the U.S. Treasury in taxes. As America fights to restore global standing that eroded during the Biden Administration, AmFree is standing up for common sense and American industry.”
“AmFree will defend Free Enterprise wherever there is a threat. We look forward to the next phase of this important litigation,” concluded Rob Engstrom, President of AmFree Chamber.
AmFree Chamber was joined in their lawsuit by four “intervenors” – or interested third parties with multinational members with operations abroad – including the Arkansas Chamber of Commerce, the California Business Roundtable, the Kansas Chamber of Commerce and the Kentucky Association of Manufacturers.
The plaintiffs are represented by Jones Day and Loyens & Loeff. The EU adopted Pillar 2 in October 2021 after an agreement reached by 137 members of the OECD. Treasury Secretary Janet Yellen, who represented the Biden-Harris Administration in the negotiations, supported Pillar II as benefitting “the entire world.” The bipartisan Joint Committee on Taxation has estimated that a global minimum tax could cost American companies $122 billion in revenue to foreign taxes.
In June, U.S. Treasury Secretary Scott Bessent announced an agreement with G7 peers to exclude U.S. multinational enterprises from Pillar 2 taxes, including the UTPR, under the OECD global minimum tax framework.
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About AmFree Chamber
The American Free Enterprise Chamber of Commerce (AmFree Chamber) is a trade organization representing American businesses of all sizes. It is dedicated to advancing the principles of free enterprise, free markets, limited government, and American leadership globally. AmFree Chamber is chaired by the Honorable Terry E. Branstad, who previously served as Ambassador to China and was the longest serving Governor in American history.
AmFree Chamber has members representing dozens of industries and from across the United States. Since its founding in 2022, AmFree Chamber has aggressively represented its members’ interests through legislative outreach, regulatory comments, and judicial briefing.