The trench warfare between Ireland and its eurozone partners, on the night of 11 March, confirms that it will be no picnic for the Council to adopt the proposal for a directive on a common consolidated corporate tax base (CCCTB), to be presented by the European Commission, on 16 March. A preliminary version of the 'euro pact' adopted by the 17 eurozone members even stated explicitly that the use of 'enhanced cooperation' by certain states would probably be needed to avoid a failure.Of course there is an awful lot about how marvellous this will be, but the article finishes with a warning note,
Certain states – Ireland, the United Kingdom, Slovakia and the Czech Republic, among others – are keen on keeping their prerogatives and fear that the CCCTB may represent the first step towards European tax harmonisation. They are therefore opposed in principle to the proposal.And some. Oh the financial crisis just has to be the greatest beneficial crisis yet. (Here is an example I wrote about in 2007)
A critical study carried out by the international audit firm Ernst & Young tends to demonstrate that use of the common tax base would inevitably impact on the location of employment in the EU and on member states' tax revenues. As a result, some tax rates would probably have to be raised, especially in Ireland.
Some comments submitted to the Commission's DG Taxud during the interdepartmental consultation echo that view: "The member states should be encouraged to pay special attention to the potential risks represented by the introduction of the CCCTB for their revenues," states one.