EC Meets To Discuss Corporate Taxation

by Ulrika Lomas, Tax-News.com, Brussels

25 October 2001

It was revealed that the European Commission (EC) met on Tuesday to try and work out a way forward for corporate taxation in the European Union.

Following the release of a study which showed that the wide discrepancies between countries over corporate taxation put the region at a competitive disadvantage, EU Internal Market Commissioner, Frits Bolkestein formulated a number of proposals, which he put to the Commission earlier this week.

Speaking to the Financial Times, Mr Bolkestein announced that complete harmonisation was not perceived as a viable solution, and was therefore not under discussion: 'I strongly believe that there is no need for an across-the-board harmonisation. I believe that such an approach would be an oversimplification of the issue,' he explained.

There are reportedly two models for European company taxation under serious consideration following Mr Bolkestein's submission. Under the first scheme, a multinational company would be taxed in accordance with the system in the country where its main headquarters are established, and under the second, an international organisation could elect to calculate a single tax base for all its European operations.

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