Speaking at last week’s ICAEW dinner, European internal markets commissioner Frits Bolkestein hinted that a successful implementation of IAS could aid the creation of a common EU tax system.
‘I strongly believe that EU companies need a common consolidated tax base for their EU-wide activities,’ said Bolkestein. ‘Accounting and taxation are closely linked, and I think it is well worth examining how these common accounting standards might help us create such a common tax base.’
He went on to describe the introduction of IAS in 2005 as ‘a golden opportunity’ to make progress towards such a common tax base.
But Frank Haskew, head of the ICAEW’s tax faculty, said that significant political and legal issues still need to be addressed before any harmonisation of tax is considered.
‘On the face of it, if you want a consolidated tax base, then IAS is going to be a logical starting point,’ said Haskew. ‘But the whole thrust of IAS is marked to market, which does not bode well for those companies that don’t have that issue.’
He added that a separate tax GAAP, such as that used in Germany, may be more appropriate for creating common tax rules than IAS.
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