EU: No tax harmonisation

There are no plans to harmonise corporate tax rates across the EU, according to the European Commissioner for Taxation and Customs.

Laszlo Kovacs, speaking to the European Movement in Dublin, said that many tax rules in member states had to be "modified" to increase competition and aid proper functioning of the EU market.

He said that increased co-operation between tax authorities in member states should be encouraged.

Mr Kovacs said the commission had proposed a common tax base for companies operating in the EU which would allow firms to calculate their total profits in all their EU operations according to a single set of rules.

But he rejected suggestions that this was a step towards full harmonisation of corporation tax.

Ireland has reservations about the plan.

He also outlined plans for a Home State Taxation scheme.

This would allow smaller companies to set up a subsidiary in another member state but use the tax rules of its home state when calculating taxable profits.

But Mr Kovacs said member states, including Ireland, had been 'lukewarm' on the proposal.

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