Germany ‘not interested’ in harmonising EU tax

Germany does not want to see corporate tax rates harmonised across the EU, the country’s ambassador to Ireland has insisted.

However, it would like to a see a common set of corporate tax rules introduced to “improve the functioning” of the internal market, Dr Eckhard Lübkemeier said.

“Tax harmonisation in my view is not on the table. What’s on the table is [common consolidated corporate tax base], and that is tax base harmonisation. And by the way, you are committed to discussing this,” he told an Oireachtas committee yesterday.

The consolidated base would provide a single set of rules that companies operating within the EU could use to calculate their taxable profits.

According to the European Commission, this would mean that “a company or qualifying group of companies would have to comply with just one EU system for computing its taxable income, rather than different rules in each member state in which they operate”.

However, proposals for such a base are hugely contentious, especially in Ireland, where it is seen as a back-door way of introducing common tax rates.

Despite the fears over the consolidated tax base, and what it may lead to, the Government has agreed to discuss the proposals.

However, both Taoiseach Enda Kenny and Tánaiste Eamon Gilmore have insisted that these are only discussions, and that Ireland’s corporate tax rate of 12.5% was “off the table”.