Push for harmonised tax regime continues

THE Taoiseach’s efforts to garner support for Ireland’s opposition to harmonised corporation tax across the EU met with limited support.

EU Commission work on a proposal to harmonise the way in which companies are taxed across the EU is at an advanced stage but is not expected to be unveiled until later this year.

Germany, France and some other high-tax countries with rates of more than 30% believe their companies are using Ireland’s business-friendly tax environment to avoid paying tax and are pushing for a harmonised tax base.

However, the Government believes this will deprive Ireland of tax revenue and lead to a single company tax rate across the EU, depriving Ireland of one of its best attractions for foreign investment.

Bertie Ahern discussed the issue with the prime ministers of Poland, Slovenia and Austria when he visited them over the past three days.

Poland was quite supportive but Slovenia and Austria were lukewarm and told him they would prefer to wait and see what the commission proposes before taking a firm position on it.

When asked if he supported Ireland’s position, Polish Prime Minister Donald Tusk said: “Reduction of corporation tax is also something we would like to achieve... we will gradually come to achieve it also,” he said.