McCreevy warns of bid for EU tax deal by backdoor

Some EU member states are still seeking tax harmonisation and are using the common consolidated corporate tax base (CCCTB) to pursue their agenda, European Commissioner for Internal Markets and Services Charlie McCreevy warned yesterday. "There are many other member states who want it by the backdoor and the latest thing is CCCTB," he told the Ulster Bank inaugural public affairs lecture.

One of the aims of the consolidated tax base, which was first put to the 25 finance ministers in September 2004, is to allow EU countries to adopt a joint method of taxing company profits.

While the current and past German governments have had an open position on tax harmonisation, other countries have not been so upfront, said Mr McCreevy. "I would worry a little because it is still in the background," he added.

"Some member States are very subtle about this and they don't make it their spoken policy objective to have tax harmonisation."

But he said that during his seven-and-a-half years as finance minister attending Ecofin meetings, the issue was continuously raised in one guise or another. He said it would remain an issue while the European constitution was stalled.

The principle of unanimity would have been enshrined in the constitution, which would have ensured that tax harmonisation was off the EU agenda as long as it was opposed by just one member state. In the past it has been opposed by Ireland, Britain and Sweden.

Mr McCreevy also said he would be proposing legislative initiatives in the banking, insurance and securities fields to introduce clear, transparent and consistent rules when assessing mergers and acquisitions in the financial sector.

"Free movement of capital is one of the basic freedoms contained in the treaty. I intend to see that it is upheld, not just by enforcing existing rights but also by closing loopholes in the existing legislative framework that enable member state regulators, for example, to block or unduly delay cross-border takeovers," said Mr McCreevy.