EU plan for common tax base greeted with caution

A PROPOSAL to allow multi-national companies to use a common EU base for corporate taxes was condemned as the thin end of the tax harmonisation wedge by government and business yesterday.

A paper issued by the European Commission, to be debated at a meeting of finance ministers in Holland in September, does not suggest harmonising corporate tax rates.

But it makes a case for harmonising the method by which tax would be calculated and proposes that companies with branches in different member states could save on administration by availing of a common EU system.