France and Germany to 'harmonise' corporate tax rates

[AtW]

Ain't they lovely? United Europe at last!

"The proposals are "a first step towards more European coherence" and support the recent Euro Plus Pact treaty, which sets out rules for economic and fiscal co-ordination - which the UK, Sweden, Czech Republic and Hungary did not sign up to.

The tax reforms join France and Germany, ahead of similar proposals from the European Commission for a single "aligned" business tax rate known as the Common Consolidated Corporate Tax Base (CCCTB) for all of Europe.

But last year the EC struggled to gain consensus across all 27 EU member states. Britain has been hostile to the Commission's plans for both an energy tax directive and the CCCTB because both are seen as eroding national sovereignty, opening the door to the EU setting taxation rates.

The CCCTB is also seen as hugely damaging for countries such as Ireland, which has an ultra-low business tax rate of 12.5pc. (AtW's comment: harmonised tax rates would result in a level playing field, especially in single currency zone) Last year, Ireland, along with Bulgaria, Malta, the Netherlands, Poland, Romania, Sweden and the UK, all worked to fight off the tax harmonisation drive - which would force them to raise their own low tax rates.

Richard Asquith, head of tax at TMF Group, said: "The reluctance of many low-tax countries to back a unified tax system for Europe has been enough to push Germany and France into moving ahead alone. While the UK was always going to be the usual vociferous opponent, this will set up a potentially dangerous fission between Ireland and the core EU countries. With the ongoing risks around Ireland's debt position within the current euro crisis, this will build the pressure."

Some commentators have accused Germany of using the CCCTB to eliminate low-tax competition in the EU after being forced to pay for Ireland's 2011 €85bn bailout.

Tuesday's announcement at ECOFIN, the committee of European finance ministers, by François Baroin and Wolfgang Schäuble, identified five priority areas: group schemes, tax treatment of dividends and of interest charges, transferring tax deficits, repayment rules and the partnership scheme.

The plans will also hit the Big Four accountancy firms, which provide tax advice for companies doing business under the different regimes.

Source: France and Germany to 'harmonise' corporate tax rates - Telegraph

[DodgyAgent]

Ain't they lovely? United Europe at last!

"The proposals are "a first step towards more European coherence" and support the recent Euro Plus Pact treaty, which sets out rules for economic and fiscal co-ordination - which the UK, Sweden, Czech Republic and Hungary did not sign up to.

The tax reforms join France and Germany, ahead of similar proposals from the European Commission for a single "aligned" business tax rate known as the Common Consolidated Corporate Tax Base (CCCTB) for all of Europe.

But last year the EC struggled to gain consensus across all 27 EU member states. Britain has been hostile to the Commission's plans for both an energy tax directive and the CCCTB because both are seen as eroding national sovereignty, opening the door to the EU setting taxation rates.

The CCCTB is also seen as hugely damaging for countries such as Ireland, which has an ultra-low business tax rate of 12.5pc. (AtW's comment: harmonised tax rates would result in a level playing field, especially in single currency zone) Last year, Ireland, along with Bulgaria, Malta, the Netherlands, Poland, Romania, Sweden and the UK, all worked to fight off the tax harmonisation drive - which would force them to raise their own low tax rates.

Richard Asquith, head of tax at TMF Group, said: "The reluctance of many low-tax countries to back a unified tax system for Europe has been enough to push Germany and France into moving ahead alone. While the UK was always going to be the usual vociferous opponent, this will set up a potentially dangerous fission between Ireland and the core EU countries. With the ongoing risks around Ireland's debt position within the current euro crisis, this will build the pressure."

Some commentators have accused Germany of using the CCCTB to eliminate low-tax competition in the EU after being forced to pay for Ireland's 2011 €85bn bailout.

Tuesday's announcement at ECOFIN, the committee of European finance ministers, by François Baroin and Wolfgang Schäuble, identified five priority areas: group schemes, tax treatment of dividends and of interest charges, transferring tax deficits, repayment rules and the partnership scheme.

The plans will also hit the Big Four accountancy firms, which provide tax advice for companies doing business under the different regimes.

Source: France and Germany to 'harmonise' corporate tax rates - Telegraph

I do not know why you are clapping. These two countries are effectively creating a price fixing anti competitive cartel. Countries should be competing with each other to attract investment and encourage the best workers to either stay or come and work in their countries. They should be made to earn their taxes and be made to spend them in order to create attractive environments to stimulate business. The lower the taxes and the better they are spent the better the living standards and higher the profits. Instead they colluding to remove choice and competition. What next? same income taxes, same wages for all workers.

[Arturo Bassick]

I do not know why you are clapping. These two countries are effectively creating a price fixing anti competitive cartel. Countries should be competing with each other to attract investment and encourage the best workers to either stay or come and work in their countries. They should be made to earn their taxes and be made to spend them in order to create attractive environments to stimulate business. The lower the taxes and the better they are spent the better the living standards and higher the profits. Instead they colluding to remove choice and competition. What next? same income taxes, same wages for all workers.

Depends on your vision of Europe doesn't it? Federalists want everything harmonised whilst at the other end of the scale (what do you call the other end of the scale) they just want common trade agreements amongst separate national entities.

Being a long term Euro contractor I would be pleased to see harmonisation in the rules. One of the biggest worries for any of us working across borders is knowing that we are operating legally. As ever the powers that be are proposing some ridiculous piece of legislation that will not help the majority of traders.

[Lockhouse]

DA is right. This is a very bad thing indeed.

[scooterscot]

I do not know why you are clapping. These two countries are effectively creating a price fixing anti competitive cartel. Countries should be competing with each other to attract investment and encourage the best workers to either stay or come and work in their countries.

They do, they have, I'm already working there.

Are you saying different countries in the UK should compete against each other for success?

[Platypus]

Are you saying different countries in the UK should compete against each other for success?

Are you saying they don't already?

Because they do. Look up Enterprise Zones.

Budget 2011: selected enterprise zones designed to encourage new investment | UK news | guardian.co.uk

[Lockhouse]

Are you saying different countries in the UK should compete against each other for success?

That would be great, yes.

[DodgyAgent]

They do, they have, I'm already working there.

Are you saying different countries in the UK should compete against each other for success?

Virtually every walk of life and every institution should enjoy the element of competition. Of course in your case the reverse is also true in that we can also offload our idiots to another country

[doodab]

Countries should be competing with each other to attract investment and encourage the best workers to either stay or come and work in their countries.

They do. Not everyone wants to compete on price and be forced toward the lowest common denominator in other areas.

The lower the taxes and the better they are spent the better the living standards and higher the profits. Instead they colluding to remove choice and competition.

Yes because quality of life and corporate profits in Spain, Greece and Portugal are far higher than in Germany aren't they?

You should give up pimping for a living and start selling that tulip you are smoking instead

[scooterscot]

Are you saying they don't already?

Because they do. Look up Enterprise Zones.

Budget 2011: selected enterprise zones designed to encourage new investment | UK news | guardian.co.uk

That's a piece of paper, the reality is swathes of northern England, Scotland, Wales and NR are already holding up the white flag saying we give, London you won!

Some competition. It's the most un-level playing field imaginable.