French and German plans to create an inner core within the EU have been bolstered by a European Commission push to increase EU co-operation on tax.
The Commission is trying to build up support among EU governments for a ground-breaking scheme to create common rules for corporate taxation within a limited number of EU states.
It has circulated a paper to national capitals and believes it has had favourable initial responses from enough countries to proceed with its plan.
This would fall short of imposing minimum tax rates - a long-term goal of Paris and Berlin and fear of the Republic. But it would create a common set of rules within participating countries for calculating companies' tax burdens by harmonising the corporate tax base. It would also be the first time that EU provisions for an inner core of member states had been used.
Tax is subject to national vetoes in the EU, and the UK and the Republic have consistently indicated their opposition to any sort of harmonisation. But under the EU treaty, a group as small as eight countries can proceed with its own system. The matter will be discussed at a meeting of finance ministers in September.
The Commission believes it has had favourable early indications from the Netherlands, Sweden, Denmark, Finland, Austria, Poland, Slovakia, Estonia and Hungary, as well as France and Germany. - (Financial Times Service)
