“The US is actively intensifying international tax competition. At 21 percent, the corporate tax rate in the US will be significantly lower than the average tax rate for companies in the OECD countries of around 25 percent. The improved depreciation regulations and tighter regulations for cross-border companies included in the US legislative package set considerable incentive to relocate corporate functions and investments to the US.
The US tax reform plan highlights the fact that tax policy also always affects the country's appeal as a business location. The new federal government must take action in response to this increased international competition. The move by the US to cut its corporate tax rate and turn it into a low-tax country, from Germany's perspective, now makes an extensive reform of the outdated external tax regulations in Germany all the more pressing.”