France And Germany Formally Call For Harmonised Corporate Tax Rate

by Ulrika Lomas, for LawAndTax-News.com, Brussels

01 June 2004

According to reports in the European media last week, Germany and France have now officially called for corporate tax rates to be harmonised across the European Union.

In a letter to the EC dated May 26, German Finance Minister, Hans Eichel and his French counterpart, Nicolas Sarkozy explained that:

"The German and French governments believe it is urgent to strengthen at European level a fair framework for competition for our companies within the internal market. We are therefore proposing that the Commission make a concrete proposal as soon as possible for a single corporate tax base, that if possible also includes a minimum tax rate."

Responding to the letter, which represents the countries' first formal call for action since the accession of 10 new EU member states, some with significantly lower corporate tax rates than those levied in France and Germany, EC spokesman Jonathon Todd announced that:

"The European Commission is in favour of harmonisation of the corporate tax base to increase transparency and lighten the administrative burden on companies doing business in more than one country. However, the Commission is not in favour of harmonisation of tax rates."

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