EC propose 'Single Market Act' to boost market integration
The European Commission is proposing to introduce a common European tax base for companies that trade across borders over the next two years in order to boost market integration.
The body said that it adopted the 'Single Market Act', which sets out about 50 proposals in all, on 27 October in a bid to “boost growth and restore confidence” in the benefits of a single integrated European market. The aim is to enforce any ratified proposals by 2012.
Viviane Reding, EC vice president and EU Commissioner for Justice, Fundamental Rights and Citizenship, said: "Businesses and citizens have reaped huge rewards as the EU steadily broke down internal barriers to goods, services and people. I want to build on our achievements so that everyone – from tourists and students to workers and small business owners – can truly benefit from a European area of freedom, security and justice."
According to tax-news.com, one of the key priorities set out in the plan is to simplify stock exchange listing rules to make it easier for small-to-medium enterprises to gain access to sources of funding. Accounting rules will likewise be simplified, while the Commission will also look at "introducing a common tax base for businesses operating cross-border".
European Taxation Commissioner Algirdas Semeta indicated that the EC would issue a formal proposal for a common consolidated corporate tax base next year. Brussels has brushed aside fears that a CCCTB would be a first step towards the harmonisation of European tax rates, but low-tax countries such as Ireland remain unconvinced and are concerned that the costs for businesses operating in certain member states could increase.
In news elsewhere, the coalition government promised to put European Union plans to tax the citizens of member states through VAT or financial transaction taxes to a vote. Bill Cash, the Conservative chairman of the House of Commons scrutiny committee, said: "EU taxation proposals are invasive of British democracy's constitutional position."
EU budget commissioner Janusz Lewandowski also admitted that if Europe raised taxes directly, it would effectively lead to a "transfer of sovereignty". As a result, such a move would need ratification because “it is the prerogative of a national state to set its own taxes”, he added.