Estonian Commissioner Calls For Corporate Tax Base Harmonisation

by Ulrika Lomas, Tax-News.com, Brussels

13 July 2004

Estonian European Commissioner Siim Kallas, was reported as announcing on Monday that he supports the notion of a harmonised European Union corporate tax base.

Speaking to the Finnish business daily ‘Kauppalehti’, Mr Kallas argued that the member states that acceded to the EU in May this year, Estonia among them, cannot afford to give such generous corporate tax breaks as the older, richer members of the European single market.

"Countries with higher taxation can offer many discounts and exceptions thanks to which companies do not need to pay any taxes at all," Mr Kallas told the paper.

"The new member states are forbidden from using such exceptions, so in countries with low taxation everyone nevertheless has to pay taxes," he continued, adding:

"The situation is extremely unjust for the new countries. I therefore support tax base harmonisation."

Estonia’s personal and company income tax rates are among the lowest in the European bloc. However, Kallas commented that it would be unwise for the EU to harmonise policies on direct taxes or labour market rules.

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