Tax reforms being considered by the US Treasury could disrupt international insurance and reinsurance business, the Commission has warned. The reform bill, which includes base erosion and profit shifting measures, could also violate international treaties against double taxation, the EC believes.
Double taxation measures would hit European insurers and banks operating in the US.
In a letter to the US administration, the Commission said: “As the world’s largest economy, we naturally expect the US to ensure that any tax reform will be non-discriminatory and in line with its WTO obligations.”
During a press conference in Brussels this week, EC vice-president Jyrki Katainen reinforced the EC’s position, saying: “The European Commission recognises the US government’s interest to reform its domestic tax system and is committed to tackling tax base erosion and profit shifting.
However, the draft US tax bill as it currently stands contains elements that may lead to unfair trade practices incompatible with WTO rules, as well as with existing double taxation treaties.”
He added: “Bearing in mind that almost half of transatlantic trade is intra-company trade, there is a risk of seriously hampering trade and investment flows between our two economies. This must be avoided.”
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