France To Push For EU Common Company Tax

When France takes over the EU Presidency on July 1st 2008 it is planning to push forward plans for a common EU company tax base. The French economy minister Ms Christine Lagarde said, after a tax forum organised by the European Commission, that France was determined to forge ahead with the common EU company tax base.

EU tax Commissioner Laszlo Kovacs has long advocated the corporate tax base idea as a way to simplify cross-border business and to cut red tape for European companies by setting up a single system for calculating taxes across the 27 member countries.

There has been some opposition mainly from the UK, Ireland, Estonia, Lithuania, and Slovakia. They are afraid that such a common tax base would be the first step towards harmonisation of tax rates, an area defended by EU states on the grounds of national sovereignty.

Ms Lagarde says what matters is the ultimate taxation paid by companies. That depends on two things, the tax rate and the basis. “Agreeing on the basis would be extremely positive. So we will aim for that,” she added. It seems the French EU Presidency will have this issue firmly on its agenda from July onwards.

The Commission has set up a special working group, which includes national experts to work on calculations of a base, which would be acceptable by all countries. Brussels is also awaiting results of an impact assessment study before it tables concrete legislation.

Margot Parker
Director
Eurocom-Consult.com
www.eurocom-consult.com

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