Insurance Europe has called on the European Commission to act urgently following the United States’ decision to withdraw from the global minimum tax initiative.
In a letter to EU Commissioner Wopke Hoekstra, the organisation expressed concern over the US administration’s decision to abandon support for the global agreement and its threat to impose retaliatory tax measures on residents of jurisdictions implementing rules the US considers extraterritorial.
At a time of increasing geopolitical and économie uncertainty, the European Union must continue to act as a reliable global partner, committed to the rule of law, multilatéral coopération, and fair économie governance. At the same time, there is a need to safeguard the competitiveness of European businesses, and so to refrain from subjecting them to burden resulting from global frameworks, which their non-EU counterparts would not be subject to.
EU Commissioner Wopke Hoekstra
“Unfortunately, recent developments in US tax policy under President Donald Trump, particularly regarding the global minimum tax, poses significant risks to the global competitiveness of European companies. President Trump has not only ruled out his government’s support of the global minimum tax but has also signalled potential retaliatory measures, including tariffs and punitive taxes on residents of countries whose tax rules the US Treasury deems discriminatory or extraterritorial,” Wopke Hoekstra said. Trump`s “tariffs” could increase P&C insurance claims by $10 bn to $36 bn.
The shift in US policy risks placing European insurance companies—including insurers—at a competitive disadvantage by imposing regulatory and fiscal obligations not faced by non-EU counterparts.
Insurance Europe urged the Commission to consider suspending the global minimum tax, lead renewed international negotiations through the OECD and G20, and reassess its position on minimum taxation.
The letter emphasized that if the global minimum tax proceeds, the EU must push for major simplifications. It also called for reduced duplication within the EU tax system to improve efficiency and reduce compliance costs.
The organisation warned that President Donald Trump’s stance on tax policy—including rejection of the global minimum tax and the threat of tariffs and punitive taxes—may directly target the Under-Taxed Profits Rule (UTPR), which is a central component of the global agreement.
Such measures could result in additional withholding taxes and penalties that would harm European insurers and policyholders by impacting investment returns and savings.
To protect EU businesses, Insurance Europe recommended the following:
- Suspend the global minimum tax while negotiations continue within the G20/OECD Inclusive Framework.
- Ensure any future agreement includes a level playing field and equitable treatment for EU companies, potentially by extending the UTPR Safe Harbour to US firms.
- Reevaluate the administrative costs of Pillar 2 in the context of the insurance sector and assess whether the compliance burdens are justified.
If the EU maintains its commitment to the global minimum tax, Insurance Europe proposes the following simplifications:
- Whitelist jurisdictions with effective tax rates of at least 15%.
- Adjust rules for investment entities to avoid excessive compliance demands and preserve tax neutrality.
- Simplify reporting and allow companies to use existing accounting data.
- Allow full inclusion of deferred tax liabilities (DTLs) in effective tax rate calculations, regardless of term.
- Maintain and adjust the transitional Country-by-Country Reporting (CbCR) Safe Harbour.
- Exclude immaterial entities from GloBE scope to focus compliance resources.
- Minimize differences between GloBE rules and financial accounting.
- Revise Global Information Return reporting to reduce burdens and improve functionality.
- Clarify treatment and eligibility of tax incentives to support legitimate investments.
- Standardize deadlines and formats for Qualified Domestic Minimum Top-up Tax (QDMTT) filings.
Insurance Europe also encouraged the Commission to streamline internal EU tax requirements—such as DAC6 and CFC rules under the Anti-Tax Avoidance Directive (ATAD)—to improve consistency and lower compliance costs for cross-border businesses.
The organisation expressed its willingness to engage further and assist in addressing the challenges surrounding global tax reform.
