EU common tax base still on agenda, says senior commission official

Ireland, the UK and the Netherlands oppose such a move

The European Commission’s push for common rules which would see companies pay tax where they make sales, rather than where they are based – a move that could damage Ireland’s attractiveness to multinationals – is “not history”, a senior commission official has said.

The push for a common consolidated corporate tax base was first put on table two years ago after a decade of preparation, Philip Kermode, director of the commission’s directorate-general for taxation, told an Oxford University conference.

Progress on the issue is currently in the hands of the Irish EU presidency, which “must regard this as a somewhat poisoned chalice”, said Mr Kermode, who is one of Ireland’s highest-ranked officials in the commission.

The creation of a common consolidated corporate tax base (CCCTB) would not create equal corporate tax rates throughout the EU but would allow firms to comply with an EU-wide system for computing their liabilities.

Concrete action
Ireland, the UK and the Netherlands, oppose a CCCTB, while doubts about it exist elsewhere, but Mr Kermode said the European Council had demanded "concrete actions – no more theory, please, concrete actions" on taxation.

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“We have no corporate tax harmonisation, per se: this proposal is not a proposal to harmonise corporate taxes, but what it has done is to open a very detailed discussion at che Council about the elements of a tax base.

“It does appear to us now that there is a certain amount of push towards continuing discussion on a so-called step-by-step basis which concentrates first on the base,” Mr Kermode told the Oxford University Centre for Business Taxation conference.

Mark Hennessy

Mark Hennessy

Mark Hennessy is Ireland and Britain Editor with The Irish Times