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Eurealist :: Main Page: “View Article A COMMON corporation tax
by Eurealist on May 25, 2005 10:55AM (BST)

A COMMON corporation tax could be in place across Europe within three years, the EU Tax Commissioner predicted today. Laszlo Kovacs said those countries that currently opposed such a move, seeing it as an attack on their sovereign right to fix economic policy, would come around.

Skip additional links’My assessment is three years if everything goes well,’ Kovacs told a conference on EU policy in Stockholm when asked when the common corporate tax base would be ready.

He said a working group of senior officials was already looking at different ways that tax bases could be harmonised.

‘At the moment there are 25 different ways to calculate the corporate tax base … If we manage to have only one EU-wide set of rules that will increase competitiveness,’ he added.

He said 20 countries backed having such a single way of calculating corporate tax, with 4 or 5 other countries more reluctant.

‘They are afraid that it is a Trojan horse to implement the harmonisation of tax rates at a later stage,’ he said. ‘We have no ambition and I have no personal ambition (to do that).’

His predecessor overseeing EU tax affairs, Dutchman Frits Bolkestein, made the original proposal on a common corporate tax base last year and finance ministers agreed in September 2004 to study the possible launch of such a system.

Kovacs also said he favoured allowing the 10 new member states of the EU to able to extend the exceptions they have from current minimum VAT rates of 15% when they expire in 2010 in order to stay competitive with the 15 old members, whose derogations from minimum rates have no time limit.

However the Government promise on the FCO EU Myth website:

We control tax and social security
The Government negotiated successfully to keep a national veto over tax proposals.

They also tell us

Our rebate remains protected
We keep a veto over the UK’s contributions to the EU budget. That means we can block any attempt to end our rebate.

Reading the news recently we can assess how much relevance to give that statement!

On a different point but totally incorrect the FCO goes on to say:

Social Security proposals are subject to an effective veto through a national ‘emergency brake’ mechanism allowing any Member State to refer a proposed law to the European Council (the body composed of national heads of state/government) for decision by consensus.

Subsidiarity, is not an emergency break, the only power it gives to the British government is the power to be ignored