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Franco-German Common Corporate Tax Plans Ahead Of Schedule

by Ulrika Lomas, Tax-News.com, Brussels

08 September 2011


Showing that Franco-German plans for tax harmonization are gathering pace, French Finance Minister François Baroin revealed that concrete proposals for a common corporate tax base and rate in France and Germany will be on the table as soon as next year.

Following recent talks with his German counterpart Wolfgang Schäuble, Finance Minister Baroin confirmed that although the euro zone has a governance problem, and although the process of policy making has to be improved, advances are being made, notably in the area of corporate taxation, which will serve as an example of much greater European integration.

Baroin explained that plans for a complete project would be drawn up for 2012, with planned implementation in 2013. In practice, the minister continued, the aim is to begin work on fiscal convergence in the collective budget this autumn.

Regarding progress on plans for a financial transactions tax, Baroin revealed that a specific proposal is currently being drawn up, which will then be submitted to the European Commission in September, for examination in the autumn. While acknowledging that a “definitive position” has not as yet been agreed on the tax base and the tax rate, or indeed on the recipient of the tax (the Commission or the member states), Baroin emphasized the determination to “obtain results” at the forthcoming G20 meeting in Cannes on November 3 and 4.

Following a bilateral mini-summit meeting in Paris last month, German Chancellor Angela Merkel and French President Nicolas Sarkozy called for a common European 'economic government' to be established, spearheaded by an appointed leader, and for the fiscal and economic policies of euro zone member states to be dovetailed in order to strengthen the euro as a common currency.

At the time it was revealed that the finance and economic ministers of both France and Germany would develop proposals for a common corporate tax base by 2013, and that, at international level, both governments would push for the introduction of a financial transactions tax.

TAGS: tax | European Commission | budget | France | Germany | G20 | currency | Europe

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