Ireland warned on EU taxation future

IRELAND will lose competitiveness to other EU member states if it continues to resist adopting a common tax base, the European Taxation Commissioner Laszlo Kovacs warned.

The Irish Government, together with Britain and about three other EU members, are opposed to harmonising corporate tax or the way it is calculated.

But Mr Kovacs plans to introduce legislation in 2008 to allow up to 20 countries proceed.

Having the same criteria for assessing corporate tax would allow businesses to compare the real rates of tax between different countries.

Mr Kovacs denied this would result in a “race to the bottom” to reduce corporate tax rates. Ireland has the lowest at 12.5%.

“The same tax base throughout the EU will increase competitiveness of individual countries,” said Mr Kovacs.

EU Internal Markets Commissioner Charlie McCreevy has ridiculed attempts to introduce a harmonised tax base