Brussels tax plans slammed as harmonisation by 'stealth'

EU PLANS TO simplify corporate taxes have been slammed as introducing harmonisation for multinationals by 'stealth'.

The claims come from the chairman of Taxand, the international tax advice organisation, who added that it would restrict the movement of multinational companies.

The plans involve the introduction of a common consolidated corporate tax base (CCCTB), which would allow companies to calculate taxable profits at an EU level rather than using the rules of each individual state in which they trade.

Frédéric Donnedieu de Vabres said there has been pressure over low corporate tax rates in Europe but accused Brussels of seeking a way of ensuring "multinationals have no choice on where to locate to receive beneficial corporate tax incentives".

He added that while harmonisation might be welcomed for its simplicity "it will undoubtedly restrict their movements and so this blanket Europe-wide tax base for multinationals will hit certain countries harder than others, impeding their recovery from a torturous few years of economic downturn.

"This undoubtedly has implications for a number of smaller economies within the EC, who are striving to attract inward investment and may now be hindered by a blanket approach that may well drive multinationals back to larger, higher profile economies."

The EU launched its plans for a CCCTB yesterday. Tax commissioner Algirdas Šemeta (pictured above), said: "The CCCTB will make it easier, cheaper and more convenient to do business in the EU.

"It will also open doors for SMEs looking to grow beyond their domestic market. Today's proposal is good for business and good for the EU's global competitiveness."