Battle for tax rate harmony heats up

THE battle to harmonise tax rates across Europe is likely to hot up rather than disappear over the next few months, despite the elimination of potential loop-holes in the new Constitution.

At present Ireland has the lowest Corporation tax rate in the EU 25 at 12.5%, though its effective rate according to Deloitte Touche is just marginally more attractive to investors than those in many of the new EU member states.

France and Germany, with rates of 34% and 38% respectively, are increasing the pressure to harmonise corporation tax, and they would like to see everyone's rates increased to come closer to their own.