Advantages of the consolidated corporate tax base would be reduced compliance costs, eliminating transfer pricing problems, the simplification of international restructuring operations, and avoiding double taxation and discrimination, the Commissioner stated.

Many participants agreed that in the long term only a common EU tax base would provide greater efficiency, simplicity and transparency in company tax systems and preferred the approach of a Common Consolidated Tax . A Home State Taxation approach was preferred by small and medium enterprises for which this approach might present simplification advantages. Many participants agreed that a European Corporate Income Tax and compulsory harmonisation of existing tax bases seemed unfeasible at this time, although they might have the advantage of completely eliminating distortions.

The possibility of testing the common EU tax base in experimental 'pilot projects' such as for the European Company were among the topics which received the most attention. Using the forthcoming International Accounting Standards (IAS), which will be binding for the consolidated accounts of EU listed companies, as a starting point for developing a common tax base was also of great interest.

Above all, it would be necessary to develop an appropriate mechanism to apportion a common EU tax base between Member States which would, regardless of the technical approach chosen, continue to apply their individual company tax rates.

Following these political and technical discussions and public consultations, the Commission will publish a report on its policy conclusions on the common tax base concept by 2003.

See Commission study on Company Taxation

See also Commission press release on results of the conference,
the key note address of Commissioner Bolkestein,
and other Conference papers.

© Graham Bishop