The European Commission may propose setting up a single EU-wide authority to administer its plan to harmonise Europe's corporate tax base.
It has also found that there is a "degree of support" to incorporate Europe's financial sector into the scheme from the start, but this will prove complex.
Both proposals are being vociferously opposed by the Government, which regards tax as a matter of national sovereignty and has concluded that the commission plan could damage corporate tax revenue.
Fianna Fáil MEP Eoin Ryan said that including financial services in the harmonised tax base would be hugely complex and would pose a major threat to the Irish Financial Services Centre.
It would inevitably lead to higher corporate tax rates and undermine Ireland's competitiveness, he said.
A progress report to be published tomorrow by tax commissioner Laszlo Kovacs concludes that the introduction of a common consolidated corporate tax base would make the EU a "more attractive market for investment".
It also recommends pressing ahead with the strategy even though it "poses a number of technical difficulties for member-states".
Under Mr Kovacs's draft plan EU states would agree to harmonise the hundreds of different elements which are used by states to calculate corporate tax rates, commonly called the corporate tax base.
Mr Kovacs argues that this would improve European competitiveness by reducing compliance costs for companies and by boosting the EU internal market.
He plans to propose European legislation next year and to have a consolidated corporate tax base up and running in Europe by 2011.
The progress report seen by The Irish Times says that it will be necessary to establish a single consolidated assessment and appeals process for companies to avoid a situation whereby they would face 27 different national administrative tax processes. The commission envisages either designating a single national appeals process for firms, which could be appealed to the European courts, or setting up an EU-wide tax authority.
It also concludes that there is a "degree of support" to include the financial sector in the common corporate tax base from its inception.
But it says that there is no consensus over the nature of the specific rules required for a common European consolidated tax base to suit the sector.
Minister for Foreign Affairs Dermot Ahern is expected to raise the issue of corporate tax with European Commission president José Manuel Barroso when he meets him on a visit to Northern Ireland today.
