Brussels / Rotterdam, 18/10/2001 (Agence Europe) - European Commissioner Frits Bolkestein confirmed on Thursday at a conference in Rotterdam that the Commission is next week to present a communication including a study on corporate tax in Member States and political conclusions on tax obstacles and the means to overcome such obstacles.
The Commissioner pointed out that, in his opinion, the results of the study do not require Community action at taxation level. He did not specify, however, whether he plans to tackle the matter simply as far as the tax base is concerned, a guideline announced in the communication on the EU's tax policy in May this year. During discussions with the Commission this week, Commissioner Pascal Lamy, it appears, urged for the Commission to go further by tackling harmonisation of rates, in order to avoid tax competition. Mr Bolkestein remarks for his part that the different rates can vary by 30% from one State to the next and that the study shows the importance of "statutory rate tax, as opposed to tax base in determining the effective tax rate".
It is surprising, notes Frits Bolkestein, that, eight years after the setting in place of the single market, there are still so many obstacles. Speaking of certain elements in the "fascinating" study of over 500 pages, the Commission notes that the companies encounter double taxation problems on: 1) dividends, 2) mergers, 3) transfer pricing. He also noted that some Member States allow losses to be offset, while
others simply tax profits, considering that the Commission's proposals could be based on the Danish experience (Denmark introduced a system allowing company amortization of their losses, while maintaining the general system founded on taxation of profits). In a single market, is it possible to justify the existence of about one hundred bilateral treaties between our Member States on taxation?, asks the Commissioner, who goes on to ask: "Or would we be more efficient with a single standard, a European treaty model for example, or a single multilateral treaty?. The Commission's communication will be a comprehensive response, he promised.