Controversial single EU tax base to be put on ice

Plans to push forward a common consolidated corporate tax base are to be put
on the back burner by France when it takes up its presidency next month.

The announcement follows Ireland’s vote to reject the Lisbon Treaty and is
being interpreted as signalling to the Irish that the EU is not intent on
encroaching on sovereignty.

‘It is on the agenda but we are not pushing it. It is alive, but not kicking
very much,’ Christine Lagarde, France’s finance minister, told the

Lagarde’s comments in April that France would put tax base harmonisation on
its agenda later this year worried Ireland, which has been a strong opponent of
plans to harmonise the way corporate tax is calculated. Like the UK it feared
that it would lead to harmonised tax rates.

She also said that France wanted to push for a cut in VAT rates for
labour-intesive services, including restaurants and hotels, and on
energy-efficient products.

It also plans to table an amendment for a mechanism to reduce VAT on fuel
when oil prices risk triggering ‘social unrest’.

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