Kovacs Remains Firm On Harmonisation Of EU Company Tax Base
European Commissioner for Taxation, Laszlo Kovacs has stated that plans to create
a common corporate tax base across the European Union will be completed by the
end of this year, according to the Financial Times.
Stating that business is "firmly supportive" of the plans, Mr Kovacs
expressed the belief that if companies were allowed to apply a single EU-wide set of rules
for company tax purposes, this would eliminate most of the problems such as
double taxation they currently face when they do business across borders, and
lead to a substantial reduction in compliance costs. Mr Kovacs is also of the belief that a harmonised company tax base will increase
tax competition across the EU because it will make the true extent of a member
state's tax burden more transparent. Despite opposition from the UK, Ireland, the Czech Republic, Estonia and Slovakia
to any move towards corporate tax harmonisation, Mr Kovacs has stated that he
is prepared to leave them outside the scheme, and move forward under the auspices
of an 'enhanced cooperation' initiative. Mr Kovacs also faces hostility towards tax harmonisation from within the European
Commission itself. In a Brussels speech earlier in the month, Internal Market
Commissioner Charlie McCreevy, stated that he is "emphatically opposed
to tax harmonisation - be it by the front door or the back". McCreevy also dismissed the chances of attaining an agreement on what constitutes
a common corporate tax base as an unobtainable pipe dream, observing that: "Assuming
we can agree on [this] during our lifetime, we will probably then have completed
one third of the journey. The harder bit comes next." However, while Mr Kovacs has acknowledged the scale of the task ahead of him,
he remains confident that all of the work towards a common corporate tax base will
be completed by 2009, when his term of office ends. .
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