EU losing 5 times Greenland’s GDP to Trump’s tax conquest, experts warn as UN tax talks resume

Without any public debate, EU countries have agreed to exempt US multinationals from most of the elements of the global minimum tax – when the tax dodging of those same US multinationals costs the bloc €14 billion in lost revenues each year.¹ The loss is a significant undermining of EU tax sovereignty, fuelled by the first Trump administration’s Tax Cuts and Jobs Act which has enabled US firms to double their profit shifting², and sustained by the second Trump administration successfully bullying EU countries into exempting US firms from the proposed global minimum tax³.

The tax losses are equivalent to the EU surrendering Greenland’s GDP 4.6 times each year to the US, or handing over €30 for every person living in the EU to US multinational corporations annually.⁴

French President Emmanuel Macron recently stated that Europe would not allow itself to be dictated to by the US on how it exercises its tax sovereignty – but the tax losses and the cave-in to Trump on the global minimum tax reveal a contradictory reality.⁵

The EU’s cave-in, in negotiations held at the OECD without any chance for public scrutiny, is a stark contrast to the progress the rest of the world is making in negotiations on a UN tax convention⁶, which resume today.⁷ The negotiations provide an opportunity for countries to mount a collective defence of tax sovereignty, based on the commitment to a fair allocation of taxing rights which has already been agreed.

In a briefing published today, the Tax Justice Network is warning European countries that the UN tax talks are their last chance to defend their tax revenues and their people’s tax rights, for at least a generation.⁸

Alex Cobham, chief executive of the Tax Justice Network, said:

“Europe stood up to Trump’s land grab but bent the knee behind closed doors to his tax grab. We’re seeing EU countries get plundered at an unprecedented rate, but instead of warships raiding coastlines, it’s US corporations quietly robbing treasuries while European governments stay quiet. With Europe’s cave-in to Trump on the global minimum tax rate, the UN negotiations are now the last chance to reject appeasement and to defend tax sovereignty.

“Appeasing a bully today, at your own people’s expense and without their consent or even their knowledge, is a recipe for joining the US in its slide into authoritarian corruption. We must remember that democracy started as a fight for tax rights: no taxation without representation. Our message to EU countries bending the knee to King Trump is clear – get up and join the rest of the world at the UN fighting back for their tax rights.”

Two historic changes the UN tax talks are already delivering

Negotiations on the UN tax convention represent the biggest shakeup in history to global tax rules. The outcome of the talks will impact people everywhere, and shape economies and livelihoods for generations to come. On the line is not just trillions of dollars in countries’ tax revenues, but the sustainability of democracies, human rights and the planet.

The negotiations cover a wide range of issues, from decision-making process, and establishing new UN bodies, to commitments on specific issues like taxing high-net-worth individuals, curbing tax abuse and resolving tax disputes. The UN tax convention, once established, would lay down the groundwork, processes and principles for global decision-making on further tax matters in the future.

The negotiations have already prized two historic changes.

First, countries have committed to flipping “rule one” of the global tax system, which is the 100-year-old rule exploited by multinational corporations to cheat on tax.⁹ The rule requires countries to tax multinationals on a ‘pay-where-you-say’ approach, making it possible for multinationals to declare their profits in tax havens to underpay tax. Most countries in last year’s negotiations backed replacing the ‘pay-where-you-say’ approach with a ‘pay-where-you-play’ approach, which taxes multinationals where they employ workers and sell goods and services. The switch would make tax havens obsolete overnight. Sustaining this commitment, and defining it more granularly, in the latest round of negotiations will be a priority for many participating in and observing the talks.

Second, the negotiations have proven that the UN’s transparent and democratic forum is far more conducive to ushering in constructive tax reform, even before the convention has been established. As a result of the UN’s transparent processes, countries’ positions and views in the current talks are on the public record, in both written submissions and livestreamed statements. Campaigners, academics and experts have already collated these statements into public databases and tools¹⁰, enabling campaigners to engage more constructively with governments on the issues and alert the public to negotiation stances taken by their governments that impact them. The inclusive nature of the talks has allowed Global South countries who have been repeatedly sidelined at the OECD to push through historic commitments that benefit people everywhere. All this makes for day and night contrast with the OECD’s opaque process which saw Europe’s recent cave-in to Trump, and which has no voting mechanism nor meaningful voice for most countries.

-ENDS-

Read the briefing

Visit our UN tax talks online hub for live updates

Notes to editor

1. US multinational corporations are now responsible for 29 per cent of all corporate tax losses suffered yearly by all countries. This loss sums up to $82 billion globally every year. See the State of Tax Justice 2025 for more information and individual countries’ losses to US firms.
2. US multinational corporations were shifting twice as much profit out of countries where they operate and into the US in 2021 than they were in 2016 before Trump’s tax cut act. However, despite the record levels of profits being rerouted into the US from around the world today, multinational corporations are paying less tax to the US government than they were before Trump’s act. US multinational corporations in 2024 were booking 74% more profits in the US compared to 2016, but shockingly, paying 8% less tax compared to 2016. US multinational corporations are now responsible for 29 per cent of all corporate tax losses suffered annually by all countries, and have cost countries – including the US – a total of $495 billion in lost corporate tax from 2016 to 2021. The US is by far the biggest loser to US multinational corporation’s Trump-sponsored escalation, having lost over $271 billion in corporate tax from 2016 to 2021 – which is more than half of all the tax losses suffered to US multinational corporations during this time. US multinationals did not bring their jobs stateside following Trump’s tax cuts as promised. See the State of Tax Justice 2025 for a deeper analysis of the Tax Cuts and Jobs Act.
3. Read more about the OECD’s the “side-by-side system” exempting the US from OECD’s Pillar 2 tax reform.
4. Calculations use the World Banks’ estimate for Greenland’s GDP, standing at $3.326 billion in 2023, and EU population of 450 million, according to the Eurostat.
5. Read about Macron’s statement here.
6. A full recap of the most recent round of UN tax convention negotiations, held in November 2024 in Nairobi, is available here.
7. The schedule for the fourth session of UN tax convention negotiations is available here. The official UN page for the fourth session is here. Visit our UN tax convention webpage for live updates and analysis on the negotiations.
8. Read the Tax Justice Network’s briefing, published today, here.
9. Arguably, the most consequential feature of the current global tax system was established in the 1920’s by the League of Nations. This is the “arm’s-length-principle” which has served as the basis on which multinational corporations are taxed for a century. The principle treats the individual parts of a multinational corporation – its subsidiaries, headquarter, holding companies, etc – as separate businesses and taxes them separately. Each country taxes the parts located within its borders. This is the key principle that multinational corporations exploit when they shift profits out of one part of the corporation in one country and to another part in a corporate tax haven in order to underpay tax. We refer to this approach to tax as “pay-where-you-say” because it taxes multinational corporations based on where they declare their profits on paper – which can often be in a corporate tax haven where the only presence the corporation has is a mailbox it rents. The alternative to this approach is unitary taxation with formulary apportionment. This approach treats all the parts of multinational corporation as one entity, and requires the corporation to be taxed on the profit it makes as whole. Each country in which the multinational corporation operates – where it employs workers, makes goods and services and sells them – taxes a slice of the profits. The size of this slice is proportional to the slice of the multinational corporation’s operation that takes place within the country’s borders. So if a quarter of a multinational corporation’s workforce and sales are in Kenya, then a quarter of all the profit it declares, wherever it declares it, must be taxed by Kenya. Kenya taxes this profit in accordance with its corporate tax rate. We refer to this approach as “pay-where-you-play”. By requiring a multinational corporation’s profits to be proportionally taxed across the countries where it genuinely does real business, where each country can tax its allotted share of profit as it sees fit, unitary tax makes corporate tax havens redundant. A corporate tax haven may still choose to have a corporate tax rate of 0%, but if a multinational corporation doesn’t do real business in the tax haven and only rents a mailbox there, the share of the multinational’s profit that the tax haven can tax will be very small to non-existent. The OECD’s failed two-pillar proposals sought to narrowly implement unitary tax on a very few multinational corporations, but with deeply biased rules for how proportionality would be allotted that benefitted the richest countries and European tax havens. The UN has committed to a “fair allocation of taxing rights” in the Terms of Referenceof the UN Framework Convention on International Tax Cooperation, which is broadly understood to be best achieved by replacing the arms-length principle (pay where you say) with unitary tax (pay where you play). Countries had already signalled their willingness to move beyond the “pay-where-you-say” model when they committed in 2024 to establishing a fair allocation of taxing rights under the new convention. What remained unclear was which approach would command broad support. In the third session of negotiations in Nairobi, most countries — particularly from the global south — backed the latest text of Article 4, which holds that a state should have the right to tax a multinational’s profits when the multinational has meaningful economic activity in that jurisdiction.³ Article 4 would, in effect, flip the basis of the international tax system to a “pay-where-you-play” approach.
10. See the Tax Justice Network’s Who Wants Want Database tracking what countries have said they want in the negotiations and in written submissions.