UK Assures Ireland That EU Tax Policy Remains Unchanged

by Jason Gorringe, Tax-News.com, London

09 October 2003

According to reports in the Irish media, the United Kingdom's government has assured Ireland's Finance Minister Charlie McCreevy that Britain's stance on EU tax issues is unchanged, after remarks by UK Foreign Secretary Jack Straw indicated he would be prepared to compromise the national veto on issues connected with cross-border tax fraud.

Following a meeting in which Chief Secretary to the Treasury Paul Boateng deputised for Chancellor of the Exchequer Gordon Brown, McCreevy said that he was satisfied that there had been no change in Britain's attitude to this particular 'red-line' issue, the reports stated.

Whilst attending the Inter-Governmental Conference in Rome at the weekend, Straw said that Britain wants "to make sure that the whole of the relevant article, with the exception of some, possible, details related to cross-border fraud, is covered by unanimity." However, Foreign Office officials later sought to play down the remarks, announcing that British policy on tax harmonisation "remains unchanged".

The Irish government has taken a similar line on the issue of tax harmonisation to Britain, and will likely maintain a stout defence of its corporate tax regime, which levies one of the lowest rates in the world. However, opposition has been expressed by numerous member states, which argue that the low rate of corporate tax constitutes unfair competition, among them Sweden and somewhat ironically, Britain.

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