The BDI has taken a constructive approach to the global minimum tax since its introduction, as a level playing field promotes international investment and reduces tax-related distortions of competition. However, its practical implementation falls short of this goal. The result is a parallel tax system characterized by considerable complexity, as well as a multitude of new terms and distinctions between tax law and accounting. Companies and tax authorities are faced with a significant administrative burden, while the expected additional revenue in Germany is minimal.

The G7 agreement of June 2025 is, in principle, a welcome step, as the decision to forgo a U.S. retaliatory tax (repeal of Section 899) has avoided significant additional burdens from withholding taxes. However, the cost of this agreement—which completely exempts U.S. companies from the scope of the global minimum tax—is high and undermines the very foundation of the minimum tax concept. Without U.S. participation, the global dimension is missing, and the minimum tax effectively leads to regional disparities in treatment between European and U.S. companies. At the same time, major economies such as India and China have not implemented the minimum tax. As a result, a significant portion of the global economy remains outside the regulatory framework. Within Europe, the directive mandates implementation in EU member states, which raises questions of jurisdictional authority and, in a changing geopolitical environment, reveals a structural weakness.

The consequences for tax competition are clear: U.S. corporations are subject exclusively to the U.S.’s own minimum tax regime and the national top-up tax, and not to the complex primary and secondary top-up taxes of the global minimum tax. This results in a significantly lower compliance burden for them. European corporations, on the other hand, are required to apply the GloBE rules in comparable scenarios and must also navigate international regulatory frameworks. For German companies, the strict additional taxation provisions under the Foreign Tax Act, as well as additional national requirements, also apply.

Against this backdrop, a clear course correction is needed. First, the BDI calls for a temporary suspension of the EU Minimum Tax Directive. Member states should be able to decide independently on their course of action under the changed conditions. Without a suspension, the competitive conditions for European business locations risk becoming even more challenging. During the temporary suspension, key simplifications—as outlined in the G7 agreement—must be consistently pursued. The top priority here is the expansion and qualitative refinement of the CbCR Safe Harbor, ideally based on clearly defined, risk-based thresholds that permanently exempt stable high-tax countries from time-consuming detailed calculations. Before an overly complex system with no clear added value is introduced, a well-founded, data-driven analysis is required.

The minimum tax was created under entirely different circumstances. Now, a fundamental revision is needed that takes into account geopolitical developments, initial practical experience, and legitimate criticism. A global minimum tax should prevent distortions of competition rather than exacerbate them, and ensure a balanced relationship between cost and benefit. During a transitional phase, the OECD could consolidate existing standards, embed simplifications, and coordinate interfaces with other regimes in a way that avoids double taxation.