KAM JOINS AMERICAN FREE ENTERPRISE CHAMBER OF COMMERCE LAWSUIT TO FIGHT UNLAWFUL REQUIREMENTS BY EUROPEAN UNION NATIONS TO COMPEL THE RELEASE OF US BUSINESS TAX INFORMATION
Contact:
Caroline Scott
Kentucky Association of Manufacturers
502-417-9585
[email protected]
FRANKFORT, KY –– The Kentucky Association of Manufacturers (KAM) today announced it has joined the litigation introduced by the American Free Enterprise Chamber of Commerce (AmFree) in the Belgian Constitutional Court challenging the European Union (EU) Undertaxed Profits Rule of Pillar 2.
Pillar 2 would impose a new 15 percent global minimum tax rate that would be collected by foreign governments on American companies with operations overseas. If allowed to proceed, the Belgian Pillar 2 Rule would be effective throughout the EU and could be used to compel American businesses to release tax information related to their US operations to an EU member national government even if that nation has no interest in the American company’s US operations.
KAM has joined the lawsuit as an “intervenor” – an interested third-party business organization with member companies that operate internationally – because it shares AmFree’s concern that the EU’s proposed methods to enforce the international global minimum tax pose a challenge to American sovereignty and the global competitiveness of American companies. The Arkansas Chamber of Commerce, California Business Roundtable, and Kansas Chamber of Commerce have joined AmFree and KAM in this international legal action.
“The Constitution is clear that Congress and the Executive Branch, not foreign governments, establish and administer American tax law and policy,” said KAM President and CEO Frank Jemley. “Kentucky manufacturers could be compelled to release details of their US business operations under this misguided policy if it is not reversed, so we are pleased to join AmFree in defending American free enterprise and the global competitiveness of American companies.”
The new global minimum tax was adopted by the EU in October 2021 after an agreement was reached among 137 members of the Organization for Economic Cooperation and Development (OECD), an international and intergovernmental economic forum of which the US is a member. While adoption of the minimum rate was agreed to by the US, the method to enact the tax was not.
Jeffery Langer, General Counsel of Zoeller Company in Louisville, Kentucky, and Chair of the KAM Legal Affairs Council, noted, “Businesses have a duty to pay taxes, but the Belgium law is not the way to implement the global tax regime. The US never agreed to allow its citizens to be coerced into disclosing sensitive business information to foreign governments. The choice to rely on coercion, rather than legal means, to implement the global minimum is simply the wrong path forward.”
AmFree, KAM, the Arkansas and Kansas Chambers, and the CBR are awaiting the Belgian government’s response and the ultimate decision of the Belgian Court, which can be challenged up to the highest court in the EU, the Court of Justice of the European Union, to determine Pillar 2’s validity under European law governing the 27 EU member countries.
KAM is Kentucky’s leading industry and business organization, dedicated to growing the state’s economy, creating better opportunities for Kentuckians, and improving Kentucky’s business climate. It was founded more than a century ago.
AmFree 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.
