“The comments by Ms Christine Lagarde reflect a growing realisation across Europe, even among advocates of tax harmonisation, that CCCTB as proposed by the Commission could do more harm than good to the European economy overall” argued Brian Keegan, Director of Taxation at ICAI, adding:

“Even the most fervent CCCTB advocates, including the French, now realise that there would be heavy costs to companies in the transition from national methods of collecting tax from companies to CCCTB as proposed."

He went on to suggest that: "Adding a further uncertainty to the current mix of difficulties in the financial, energy and food markets would be unacceptable. The biggest problem being encountered by the CCCTB project at the moment is the petering out of committed political support."

ICAI has been campaigning for several years against the CCCTB, arguing that it would be complex and costly for companies, with its disadvantages far outweighing any benefits it might bring, although this view is not always shared by pan-European corporations.

The ICAI cautioned, however, that Ms Lagarde’s comments only signal a shift of emphasis.

“A CCCTB project, if not this specific Commission set of proposals, still commands considerable support. It will not go away and ongoing vigilance is required to ensure that the project is not ultimately introduced” Mr Keegan concluded.