France to Propose Common EU Corporate Tax | Business| Economy and finance news from a German perspective | DW | 08.04.2008
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France to Propose Common EU Corporate Tax

France plans to work toward developing a common corporate tax base in the European Union during its upcoming bloc presidency, the country's finance minister has said. Meanwhile, a joint green tax cut is on the table.

A row of files

Proponents of a common EU tax base say it will cut red tape

French Economy Minister Christine Lagarde told reporters on Monday, April 7, that France is "determined to push" for a common corporate tax base in the 27-member bloc when it takes over the EU presidency in July.

The expected proposal would not set a fixed tax rate in EU states, but would lay down a basis for determining rates.

EU Tax Commissioner Laszlo Kovacs has expressed support for the plan, which would cut red tape and simplify cross-border business deals.

"There is a real need for the member states to act together in certain tax policy areas," said Kovacs on Monday.

While France and Germany back the common corporate tax base, the plan has met resistance from several EU countries, notably Britain and Ireland. They fear the joint base could lead to a general harmonization of tax policies across the bloc, thereby infringing on national sovereignty.

Some European Commission officials have suggested that the proposal not be presented until after the June 12 referendum in Ireland on the EU's Treaty of Lisbon, reported the EU Observer.

Traditional light bulb, energy-saving light bulb

Britain and France favor a tax cut on energy efficient products

Green tax cut in the works

Also on Monday, Lagarde said she hoped "to make significant progress" on a combined British-French initiative to cut value-added tax on energy-saving items, such as light bulbs and appliances.

Kovacs said he agreed with "the essence" of the green tax bid, but said that "what is technically the best solution is another question." Some EU countries have said they prefer other methods of promoting energy efficient products.

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