May 17, 2001 Thursday

EU's Bolkestein to favour company tax competition in next wk's strategy plan

     BRUSSELS  -- BODY: European Commissioner for tax policy Frits Bolkestein wants to promote competition between member states' company taxes in the commission's tax strategy paper next week, a commission source said. He was reacting to newspaper reports on company tax "harmonisation" and said that Bolkestein's aim is to increase the comparability of company taxes, and he has no plans to promote minimum tax rates. "The plan is to make company tax more transparent in order to increase competition, to increase comparability of member state systems. That is Bolkestein's intention," he said. The policy paper to be discussed next week will be similar to ideas the commission presented in February and will be followed by a specific company tax strategy in June, he said. "At present there are comparisons, such as by the OECD but it depends on allowances. It is extremely difficult to make comparisons," he said. Bolkestein is keen to focus on tax problems businesses face in the internal market and this should lead to the commission challenging cases of double taxation or discriminatory systems, he said. The tax commissioner draws distinctions between fair and unfair tax competition, which can help member states attract foreign investment, he said. "For instance in Ireland, they want a 12 percent company tax rate right across the board. It is difficult for Bolkestein to say that is unfair," he said. However, "if Ireland has special schemes in the Dublin docks for financial services then that can be unfair," he added. nt

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