By Martin Banks - 1st May 2007
The commission today called on sceptical governments to supports its efforts to set common rules to calculate taxable business income across the continent.
EU taxation commissioner Laszlo Kovacs said he was looking for unanimous support from all member states that have the power to veto EU-wide tax decisions.
The commission has said a common consolidated corporate tax base for the EU would cut compliance costs for companies and make Europe a more attractive business location.
The proposal, he said, would simplify many of the complications that companies face when they move goods and file taxes across different jurisdictions, and would allow them to offset losses suffered in another EU country.
Kovacs also said the rules could be made optional for companies but did not explain how this would work.
The plans, however, immediately came under fire from, among others, UK Conservatives in the European parliament.
MEP Jonathan Evans, his party’s spokesman on economic and monetary affairs, said governments should be wary of how the plan, set to become a formal legislative proposal next year, is being “gift wrapped”.
“National governments should view these proposals with great caution,” he said.
“The plan for a common EU tax base is presented as though its purpose is to assist the single market but we know that the zealots who want a common tax level throughout the EU use precisely the same arguments.
“Imposing a uniform tax base set centrally for the 27 countries of the EU will rob member states of the flexibility that any national government needs in setting its spending and tax raising priorities.
“This is the cornerstone of national independence and governments should be wary of allowing it to be eroded.”
The plan was also branded “very damaging to business and to the interests of the wider economy” by the Irish Bankers’ Federation.
The IBF, which represents over 60 financial institutions, said it regarded the proposals as “deficient in their own right and as a gateway to a common corporate tax that would be very damaging for Ireland”.
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