The European Commission said yesterday it would push ahead with plans to harmonise Europe's corporate tax base to overcome the problems identified in the Cadbury Schweppes case.
In an initial response to the European Court of Justice judgment, a commission spokeswoman said it would look at how it could better co-ordinate the fiscal regime in the EU.
"If we have one day a common accepted corporate tax base, these problems would be eliminated. We need to co-ordinate better fiscal politics to avoid double taxation," she said.
The commission's project to introduce a common corporate tax base involves harmonising hundreds of elements, used by states to calculate corporate tax.
Supporters say the plan would make Europe's tax regimes more transparent for firms, while critics say it would destroy tax competition and lead to harmonised tax rates. The project is opposed by the Republic, Britain and Slovakia within the EU. However, it has strong supporters including Germany and France.
Last week French presidential contender Nicolas Sarkozy pushed for greater tax harmonisation and urged the removal of national vetos over tax matters.
The commission is due to publish a report on better fiscal co-operation in the autumn.
