EU deal on corporation tax 'within three years'

European Tax Commissioner Laszlo Kovacs said today he expected the bloc to wrap up a deal on a common corporate tax base within…

European Tax Commissioner Laszlo Kovacs said today he expected the bloc to wrap up a deal on a common corporate tax base within three years.

He said those countries that currently opposed such a move, seeing it as an attack on their sovereign right to fix fiscal policy, would come around.

"My assessment is three years if everything goes well," Mr Kovacs told a conference on EU policy in the Swedish capital when asked when the common corporate tax base would be ready.

He said a working group of senior officials was already looking at different ways that tax bases could be harmonised.

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"At the moment there are 25 different ways to calculate the corporate tax base. . . . If we manage to have only one EU-wide set of rules that will increase competitiveness," he added.

He said 20 countries backed having such a single way of calculating corporate tax, with four or five other countries more reluctant.

"They are afraid that it is a Trojan horse to implement the harmonisation of tax rates at a later stage," he said. "We have no ambition and I have no personal ambition (to do that)."

His predecessor overseeing EU tax affairs, Dutchman Frits Bolkestein, made the original proposal on a common corporate tax base last year, and finance ministers agreed in September 2004 to study the possible launch of such a system.