EU to push on with single corporate tax plan

The European Union tax commissioner, Kaszlo Kovacs, has said that laws
designed to create a single European corporate tax base will be presented within
three or four years – before the end of his mandate in 2009.

The move, designed to cut red tape and make it easier for companies to
operate across borders, is opposed by five EU countries, including Britain.
However, Kovacs says he is prepared to exclude them from the scheme and work
with a ‘pioneer group’ of the other 20 members.

‘We don’t think we should waste time trying to convince the other five,’ said
one Commission official in the Financial Times.

The plan for a single tax base for the calculation of corporate tax was
originally mooted by France and Germany, and the Hungarian EU tax commissioner
believes the move would simplify tax calculations and increase transparency.

‘We consider that if companies were allowed to apply a single EU-wide set of
rules for company tax purposes, this would eliminate most of the problems such
as double taxation they currently face when they do business across borders,’ he
was quoted as saying in the FT. ‘It would also lead to a substantial
reduction in compliance costs.’

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