25.1.93 OfficialJournaloftheEuropeanCommunities NoC19/65
Opinionon:
—theConclusionsandRecommendations oftheRudingCommitteeofIndependentExperts
onCompanyTaxation,and
—theCommissionCommunication totheCouncilandtoParliamentsubsequenttothe
ConclusionsoftheRudingCommitteeindicatingGuidelinesonCompanyTaxation
LinkedtotheFurtherDevelopmentoftheInternalMarket
(93/C19/21)
On29April1992,theEconomicandSocialCommitteedecided,inaccordancewiththe
fourthparagraphofArticle20oftheRulesofProcedure,todrawupanOpiniononthe
ConclusionsandRecommendations oftheCommitteeofIndependentExpertsonCompany
Taxation(RudingCommittee).
On15July1992,theCommissiondecidedtoasktheEconomicandSocialCommitteeto
drawupanOpinionontheCommissionCommunication totheCouncilandtoParliament
subsequenttotheConclusionsoftheRudingCommitteeindicatingGuidelinesonCompany
TaxationLinkedtotheFurtherDevelopmentoftheInternalMarket.
TheSectionforEconomic,FinancialandMonetaryQuestions,whichwasresponsiblefor
thepreparatorywork,adopteditsOpinionon17November1992.TheRapporteurwas
MrR.Pelletier.
Atits301stPlenarySession(meetingof24November1992)theEconomicandSocial
CommitteeadoptedthefollowingOpinionby78votesto54,with5abstentions .
I.ASSESSMENT OFTHECONCLUSIONS
ANDRECOMMENDATIONS OF
THERUDINGCOMMITTEEautonomously bytheMemberStates;itwouldpoint
outherethattheCommission'spreviousattemptto
harmonisethetaxationofcompaniesdidnotmeetwith
theagreementoftheMeniberStates;thishasledthe
Commissiontopushtheprincipleofsubsidiarity .
THEOVERALLAPPROACH ADOPTEDBYTHE
RUDINGCOMMITTEE
DETAILED EXAMINATION OFTHERUDING
COMMITTEE 'SPROPOSALSTheaimofeliminatingthedoubletaxationofcross­
borderincomeflowsisacontinuation oftheCom­
mission'searlierwork(seethe'parent-subsidiary 'direc­
tiveandthedraftdirectivesonextra-territorial losses
andintra-grouppaymentsofinterestandroyalties).
So,thisisatraditionalapproachwhichhasalready
beenapprovedbytheESC.1.Eliminationofthedoubletaxationofcross-border
incomeflows
1.1.Eliminationofthedoubletaxationofdividends
distributedbyacompanyinoneMemberStateto
aresidentofanotherMemberState
Extension ofthe'parent-subsidiary '
directive
Therecommendations oftheRudingCommitteereflect
theconcernsalreadyexpressedbytheESC.
Itisimportanttopointoutthat,ingeneral,whileit
isjustifiedtorequireevidenceofaparent-subsidiary
relationshipwhentheaimistoeliminatethedouble
taxationofagroup'sprofits,thereisnoneedfor
onewhentheaimistoexemptdividendflowsfrom
withholdingtax:eventuallysuchflowsmustbeexemp­
tedfromwithholdingtaxwhentheyoccurbetween
companiessituatedindifferentMemberStates,sinceno
distinctionshouldbemadebetweendividendpayments
andinterestandroyaltypayments.Theaimofharmonisingcompanytaxationsystems,
ratesandbasesofassessmentismoreambitious :it
wouldeventuallyleadtotheharmonisation ofMember
States'taxsystemsandoftherelativeweightgivento
differenttypesoftaxation:VAT,corporationtaxand
incometax.
Itisbasedontheconclusion (whichtheRudingCom­
mitteehastakenover)thattaxdifferencesbetween
MemberStatesdistortcompetition ,sincetheyhavea
impactonmultinationalcompanies'decisionstosetup
inaforeigncountry.
TheEconomicandSocialCommitteehasreservations
aboutthesecondobjective,sinceitbelievesthatthe
taxationofcompaniesmustcontinuetobedecided

NoC19/66 OfficialJournaloftheEuropeanCommunities 25.1.93
inadirective;oneshouldnotmerelylimitoneselfto
examiningshareholdercosts.Introduction ,tocombattaxavoidance,ofa30%with­
holdingtaxondividendsotherthanthosereferredto
inthe'parent-subsidiary 'directiveandpaidtoshare­
holdersnotidentifiedasECresidents
1.4.Offsettingbyparentsoflossesincurredbybranch­
esorsubsidiarieslocatedindifferentMember
States
TheRudingCommittee'sproposalsreflecttheconcerns
alreadyexpressedbytheESC.
TheEconomicandSocialCommitteewouldpointout
thatthereferencetoaccountslossescouldprovidean
alternativesolutiontoestablishingspecifictaxlossesin
accordancewiththeassessmentrulesapplicableinthe
countriesofregistrationofpermanentestablishments
andsubsidiaries .Assuchanaccountancyapproach
wouldbeconsistentbyitsverynature,itwouldfacili­
tateadoptionoftheRudingCommittee'ssecondrec­
ommendation ,i.e.fulloffsettingoflosseswithingroups
ofenterprises .Howeverpraiseworthythemotivesbehindsuchastep
maybe,theintroductionofa30%withholdingtaxon
dividendsotherthanthosereferredtointhe'parent­
subsidiary'Directiveandpaidtoshareholdersnotident­
ifiedasECresidentswouldhavethefollowingserious
inconveniences :
—itcoulddiscouragenon-ECinvestorsfromcommit­
tingfundstotheECandleadtoECresidents
investingoutsidetheEC:itwaspreciselythisdouble
riskthatmadetheMemberStatesrejectthepro­
posalforadirectiveseekingtointroduceaCom­
munitywithholdingtaxoninterest;
—itwouldbecontrarytotheprincipleoftaxneu­
tralitytoencouragefinancingthroughloansatthe
expenseoffinancingfromcapital,whichdetermines
thedurabilityofanyinvestment-led recoverywithin
nationaleconomies .1.5.Taxtreaties
TheEconomicandSocialCommitteesupportstheRud­
ingCommittee'sproposals.
1.2.Eliminationofwithholdingtaxesleviedbysource
countriesoninterestandroyaltypayments
betweenenterprisesindifferentMemberStates
2.Corporationtaxes
ThisproposalbytheRudingCommitteereflectsthe
concernsalreadyexpressedbytheESC.
1.3.Eliminationofdoubletaxationarisingfromtrans­
ferpricingdisputes2.1.Removalofdiscrimination resultingfromcorpor­
ationtaxsystemsandharmonisationofthesesys­
tems
Apartfromitsreservationsabouttheprincipleofhar­
monisingcorporationtaxsystems,theEconomicand
SocialCommitteefeelsthattheRudingCommittee's
proposalswouldleadtothecountryofresidenceof
shareholdersbenefitingfromextra-territorial dividends
havingtobearunilaterallythecostofreimbursingor
imputingcorporationtaxpaidinthesourcecountryof
thedividend:initsviewsuchaproposalisunrealistic
andinadvisable .TheEconomicandSocialCommitteeapprovesthe
guidelinessuggestedbytheRudingCommittee .Italso
thinksitwouldbeadvisabletodealwiththeproblems
posedbythincapitalizationandtheallocationofhead­
quarterscostsundertheheadingoftransferpricing,
andnotunderthatofcorporationtaxes.Itconsiders
thatitwouldbedesirableheretoextendthereflection
exercisetoalltheissuesraisedbytheinvoicingof
centrally-provided groupservices(includingexpendi­
tureonresearch).
TheESCwouldalsodrawattentiontotheimportance
ofimplementing harmonisedmethodsforcalculating
theinterestratesapplicabletocross-borderfinancing
withingroups.2.2.Approximation ofthestatutoryratesandbasesof
corporationtaxes—Statutoryratesofcorporation
tax
TheEconomicandSocialCommitteeobservesthat
MemberStatescompetewitheachothernotonlyon
taxratesbutalsoontaxbases:itthereforefeelsitis
unrealistictofixaminimumandamaximumtaxrate
unlesstherulesonthebaseofcorporationtaxare
totallyharmonised .Forthisreasonalong-term,step­
by-stepapproximation ofcorporationtaxshouldbe
startedwithaconvergenceoftheprinciplesgoverning
taxbases,notleastsothatthenecessarytransparency
ofcompetingenterprisesmaybeincreased.Moregenerally,itfeelstherewouldbejustificationfor
layingdowntheprinciplesforcalculatingtransferprices
andtherulesforallocatingcentralgroupexpenditure

25.1.93 OfficialJournaloftheEuropeanCommunities NoC19/67
Thecommentsonthemcanbefoundunderthat
heading.
2.9.Capitalgains
TheRudingCommittee'sproposalsareatoddswith
theprincipleofsubsidiarityraisedbytheEconomicand
SocialCommittee .
Apartfromthisobjectiononapointofprinciple,the
EconomicandSocialCommitteeconsidersitreasonable
thatonlygainsinrealterms(i.e.afternettingout
inflation)shouldbetaxed.
Inaddition,itappearsthatexemptiononcondition
thatgainsarereinvestedinfixedassetsisnottheonly
possibleformula;gainsmaybereinvestedinorderto
increaseworkingcapital.
Itisthereforealsojustifiedtoapplyareducedtax
ratetogainsrealisedfromthetransferoffixedassets,
providedthattheyarenotdistributed :byfollowinga
lineofreasoningbasedonupdating,suchatechnique
mayachievethesameeffectofreducingthetaxburden
aswouldbeachievedbythedeferredpaymentofcapital
gainstaxinasystemallowingexemptiononreinvested
gains;moreover,itdoesnotintroduceanydistortion
betweenthetaxablefigureandthefiscalfigure,andis
thereforesimplertoapply.Theproposaltoincludelocaltaxesincorporationtax
systemsalsoseemsimpossibletoputintopractice,since
suchastepwouldjeopardisethepoliticalstructureof
anumberofMemberStates.
2.3.Taxincentives
TheEconomicandSocialCommitteethinksithighly
importantthattransparency beevidentinthe
implementation ofanytaxincentiveswhichhavea
subsidisingeffect.
2.4.Definitionoftaxableprofits
TheESCconsidersthatreferencetotheaccountsshould
beusedtoavoidincreasingthetaxbaseinrelationto
theaccounts,sincesuchanincreasemoreoftenthan
notamountstoadisguisedincreaseincorporationtax
ratesoutofkeepingwiththeprincipleoftransparency .
2.5.Depreciation
Evenifcompleteharmonisation ofdepreciation
methodsisnotpossibleatthemoment,thefirststeps
shouldstillbetakentowardsanapproximation of
them.TheEconomicandSocialCommitteeisagainst
anyharmonisation ofdepreciationratesatthepresent
time.
Ontheotherhand,itseemsreasonabletocalculate
depreciation byincorporating theconsequences of
obsoleteinvestments .
2.6.Intangibles;leasing;stockvaluation;provision;
businessexpenses;occupational (extra-legal)pen­
sions
Anymovetoharmonisetherulesfordeductingthe
variouschargesundertheseheadingswouldclashwith
theprincipleofsubsidiarityraisedbytheEconomicand
SocialCommittee .
Itdoesnotthinkthatsuchharmonisation canbe
decidedatCommunitylevel.
2.7.Deductibilityofpensioncontributionspaidin
respectofexpatriateworkersortoforeignpension
funds
TheEconomicandSocialCommitteeapprovestheRud­
ingCommittee'srecommendation ,whichineffectcon­
cernsfreedomofmovementforworkersandalsoraises
theissueofdoubletaxation.
2.8.Headquarterscosts;thincapitalization ;taxlosses
Theseissuesarepartofthespecificproblemofhowto
eliminatedoubletaxationarisingfromcross-border
incomeflows.2.10.Harmonisation ofthedatesatwhichtaxesof
commonapplicationarepayable
Itseemsdifficulttoreconcilethisproposalwiththe
MemberStates'sovereigntyonbudgetmatters;itis
importanttopointoutherethatthefinancialyeardoes
notalwayscorrespondtothecalendaryear,whichmay
affectthedateonwhichtaxesaredue.
II.ASSESSMENT OFTHECOMMISSION
COMMUNICATION
TheCommissionapprovestherecommendations of
theRudingCommitteeconcerningeliminationofthe
doubletaxationofcross-borderincomeflows,pointing
outthattheserecommendations arefullyconsistent
withthemeasuresthatithasitselfproposedorwhich
havealreadybeenadoptedbytheCouncil.
Itisnotsokeenaboutthealignmentofnationallaws
oncorporationtaxbecausetheyaresocomplexand
becauseitiswaryabouttheeconomicbasisofthe
measuresproposedbytheRudingCommitteeandtheir

NoC19/68 OfficialJournaloftheEuropeanCommunities 25.1.93
effectsonthetaxreceiptsandpowerofdecisionofthe
MemberStates.
TheEconomicandSocialCommitteesharestheCom­
mission'sgeneralline,feelingthattheprincipleofsubsi­
diaritycontinuestobeanobstacletotheadoptionof
proposalstoalignnationallawsoncorporationtax.
HavingexaminedtheCommissionCommunication in
detail,itwishestomakethefollowingcomments :Itwouldalsodrawattentiontotheimportanceof
implementingharmonisedmethodsforcalculatingthe
interestratesapplicabletocross-borderfinancing
withingroups.
Whileitisinfavourofaprocedureforconsultations
betweenMemberStatespriortoanycorrectionoftrans­
ferpricesandwithaviewtostrengtheningtheArbi­
trationConvention ,itwouldalsolikeadirectiveto
spellouttheprinciplestobefollowedwhencalculating
transferpricesandtherulesforallocatingcentralgroup
expenditure .
1.3.Bilateralagreementsdesignedtopreventdouble
taxation 1.Eliminationofthedoubletaxationofcross-border
incomeflows
TheEconomicandSocialCommitteeapprovesthe
Commission'sguidelines.1.1.Extensionofthe'parent-subsidiary 'and'mergers'
directives;studying,incollaboration withthe
MemberStates,ofnewprocedurestosimplifyand
speedupthemachineryforapplyingagreements
onwithholdingtaxes1.4.Taxationofgroupsofcompanies
TheEconomicandSocialCommitteerecallstheOpin­
ionitissuedontheproposalforadirectiveonthe
offsettingbyparentsoflossesincurredbybranchesor
subsidiarieslocatedindifferentMemberStates:the
referencetoaccountslossescouldprovideanalternative
solutiontoestablishingspecifictaxlossesinaccordance
withtheassessmentrulesapplicableinthecountriesof
registrationofpermanentestablishments andsubsidi­
aries.
Assuchanaccountancyapproachwouldbeconsistent
byitsverynature,itwouldfacilitateadoptionofthe
RudingCommittee'ssecondrecommendation ,i.e.full
offsettingoflosseswithingroupsofenterprises .TheEconomicandSocialCommitteeapprovesthe
Commission'srecommendations andrepeatsitspre­
viouscallthattheparticipationthresholdfortriggering
applicationofthe'parent-subsidiary 'directiveshould
beloweredfrom25%to10%.
Moregenerally,itconsidersthat,whileitisjustified
torequireevidenceofaparent-subsidiary relationship
whentheaimistoeliminatethedoubletaxationofa
group'sprofits,thereisnoneedforonewhentheaim
istoexemptdividendflowsfromwithholdingtax:
eventuallysuchflowsmustbeexemptedfromwithhold­
ingtaxwhentheyoccurbetweencompaniessituated
indifferentMemberStates.
1.5.Neutralityoftreatmentasbetweenforeign-source
anddomestic-source dividends Itwouldalsostresstheimportanceofimplementing
newprocedurestosimplifyandspeedupthemachinery
forapplyingagreementsonwithholdingtaxes.
1.2.GeneralrulesapplicabletotransferpricingTheEconomicandSocialCommitteewouldpointout
thattheRudingCommitteeincludedundertheheading
oncorporationtaxitsrecommendation forendingthe
existingdiscrimination overthetaxingofdividends
originatingfromprofitsgainedinanotherMember
State.TheEconomicandSocialCommitteeapprovesthe
approachadoptedbytheCommission ,whichconsists
ofdealingwiththeproblemsposedbythincapitaliza­
tionandtheallocationofheadquarterscostsunderthe
headingoftransferpricing,andnotunderthatof
corporationtaxes.
ItalsoconsidersthattheCommission'sreflectionexer­
cisemustbeextended,incollaborationwiththeMem­
berStates,toalltheissuesraisedbytheinvoicingof
centrally-provided groupservices(includingexpendi­
tureonresearch).Itconsidersthatthisrecommendation ,togetherwith
theabandonmentofthereciprocityrulesuggestedby
theCommission ,wouldleadtothecountryofresidence
ofshareholdersbenefitingfromextra-territorial divid­
endshavingtobearunilaterallythecostofreimbursing
orimputingcorporationtaxpaidinthesourcecountry
ofthedividend:initsview,itishighlyimprobablethat
suchaproposalwouldobtaintheunanimousagreement
oftheMemberStates.

25.1.93 OfficialJournaloftheEuropeanCommunities NoC19/69
2.Measuresrelatingtotherates,thebaseandthe
systemsofcorporationtaxofacommoncorporation-tax systemshouldbeinitiated
atCommunitylevel.
2.1.Corporationtaxrates
TheEconomicandSocialCommitteeagreeswiththe
Commission thatitisinadvisabletosetamaximum
corporationtaxrateandthattheproposedreformof
localtaxesispoliticallymotivatedandunrealistic .
Italsohasreservationsaboutenteringintodiscussions
withtheMemberStatesontheprincipleandthelevel
ofaminimumcorporationtaxrate.
AstheCommissionpointsout,MemberStatescompete
witheachothernotonlyontaxratesbutalsoontax
bases:itthereforeseemsdifficultinpracticetoseparate
thediscussionofaminimumratefromadiscussionon
theharmonisation oftherulesdeterminingthetaxbase.Ontheotherhand,howeverpraiseworthythemotives
behindsuchastepmaybe,theintroductionofa30%
withholdingtaxondividendsotherthanthosereferred
tointhe'parent-subsidiary 'directiveandpaidtoshare­
holdersnotidentifiedasECresidentswouldhavethe
followingseriousinconveniences :
—itcoulddiscouragenon-ECinvestorsfromcommit­
tingfundstotheECandleadtoECresidents
investingoutsidetheEC:itwaspreciselythisdouble
riskthatmadetheMemberStatesrejectthepro­
posalforadirectiveseekingtointroduceaCom­
munitywithholdingtaxoninterest;
—astheCommissionitselfhints,itwouldbecontrary
totheprincipleoftaxneutralitytoencouragefinan­
cingthroughloansattheexpenseoffinancingfrom
capital,whichdeterminesthedurabilityofany
investment-led recoverywithinnationaleconomies .
III.FINALREMARKS
1.TheRudingCommittee'sbriefwasverywide­
ranging,sinceitwasaskedfor'anassessmentofthe
impactoftaxationrelativetootherfactors'whichmight
leadtomajordistortionsaffectingthefunctioningof
theinternalmarket.2.2.Taxbaseforcompanyprofits
TheEconomicandSocialCommitteewouldpointout
thattheCommission'spreviousattempttoharmonise
thetaxationofcompaniesdidnotmeetwiththeagree­
mentoftheMemberStates;thishasledtheCommission
topushtheprincipleofsubsidiarity .
Itthereforehasreservationsabouthavingadetailed
discussiononthedesirabilityandpossibilitiesofhar­
monisingthetaxbase,sincetheutilityofsuchtalks
seemsdebatable .
Similarly,theESCfeelsthatanyspecificactiontodefine
taxableprofitsintermsofaminimumbasewhich
wouldbetheprofitforaccountingpurposesseemsto
clashwiththeprincipleofsubsidiarity .
However,itapprovesofthedetailedanalysiswhichthe
Commissionwishestoundertakeofthedeductibility
ofcontributionspaidtoforeignpensionfundsbyor
forexpatriateworkers,sincetheissuewhichhasbeen
raisedcannotbeconsideredasbeingmerelyassociated
withtheharmonisation oftaxbases.
ItalsosupportstheRudingCommittee'sproposalcon­
cerningsmallandmedium-sizedenterprisesandseeking
toallowunincorporated enterprisestheoptionofbeing
taxedasiftheywereacompany :itapprovesofthe
stepstakenbytheCommissiononthispoint.Finally,
asregardstaxincentives,itsharestheCommission's
preferenceforinstrumentsofthetaxcredittyperather
thanforthoseactingthroughthetaxbase.TheRudingCommitteewasalsoaskedtolookintothe
possibilitiesofcorrectinganysuchdistortions'taking
intoaccounttheinfluencethatotherpolicies(e.g.econ­
omicandmonetaryunion)mighthaveontheextentof
thetax-induceddistortions'.
2.Throughalackoftimeorthroughitsownmod­
estytheRudingCommitteehasvoluntarilylimitedits
investigationstothestrictlyfiscalaspectsofcompany
taxation.
TheEconomicandSocialCommitteeregretsthatthe
RudingCommitteehasthusdepriveditselfofthefind­
ingsofanin-depthanalysisoftheplaceofcompany
taxationinnationaleconomicpolicies.TheRuding
Committeedidnotseektogointotheroleandecon­
omicimpactofcorporatetaxation,whichisunfortu­
nate. 2.3.Linkbetweenthetaxtreatmentofshareholders
andcorporationtax
TheEconomicandSocialCommitteesupportsthe
Commission'ssuggestionthatadebateonthechoice3.Onequestionworthansweringwouldhavebeen
whetheritispossibleforaMemberStatewhichhasto

NoC19/70 OfficialJournaloftheEuropeanCommunities 25.1.93
encourageitsindustrytomakeupadevelopmentgap
tohavethesamecorporatetaxationasthemost
advancedECcountries.States'budgetreceipts.Theexcusegiven,thatthere
wasalackofreliablestatisticalinformation ,isuncon­
vincingastaxreceiptsare,withoutdoubt,amongthe
mostreliablestatisticsavailabletoresearchersand
economists .
4.ShouldMemberStatesbedeprivedoftaxationas
atraditionalintervention—orincentive—tool?Whatwouldbetheeffectofabigcutincompany
taxationonothertaxes,particularlypersonalincome
taxes?
TheRudingCommitteedoesnothideitsdistasteatthe
useoftaxationasalever.Itquestionstheeffectiveness
oftaxaidsasaninvestmentincentiveandseemsto
preferdirectsubsidies,sometimeseventothepointof
contradicting itself,aswhenitsaystaxationplaysa
decisiveroleininvestmentlocation.DidtheRudingCommitteenothavethepossibilityof
settingupaneconometricmodeltoshowtheeffectsof
itsproposalsfortransferringthetaxburden?
ButtheRudingCommittee'spositionisunderstandable
whenonerealisesthatitsmembersaremostlytax
specialistswho—quiterightly—arewaryofthesecret
manipulations oftaxbaserules.7.TheEconomicandSocialCommitteeconsiders
thattheCommissionshouldtryandremedythisover­
sight,fortheproblemsoftaxharmonisation cannotbe
tackledwithoutconsideringthebudgetaryimpactofthe
measuresbeingproposedandtheeffectsoftransferring
chargesfromonetaxcategorytoanother.
Economistsgenerallyhavealessrestrictiveview,but
thereisunanimityonthebasicprincipleoftransparency
whengrantingaid.Aidsmustbepublicandknownto
all.8.TheESCisconcernedaboutthelackofinfor­
mationontheeffectthatestablishingauniformlevelof
companytaxation—asamedium-term objective—will
haveoninvestmentlocation.Itisnotunreasonable
tosupposethat,farfromensuringneutralityinthe
operationoftheeconomicunion,suchadegreeof
harmonisation wouldincreasetheconcentration of
industrialactivityaroundexistingcentresattheexpense
ofoutlyingorless-developed areasintheEC.This
seemsallthemoreprobablesincetheRudingCom­
mitteeitselfconcludesfromsimulationsthattaxdiffer­
encesaffectinvestmentlocation.Butonemustnotforgetthatmonetaryunionwill
considerablyreducetheMemberStates'roomfor
manoeuvreineconomicpolicy.Perhapsitisnotagood
thingtofurtherreduce,orevendoawaywith,thefew
remaininginstrumentsforactingontheeconomiccycle
andeconomicgrowth.
TheESCfeelsthatadditionalanalysisshouldconcen­
trateonknowingwhethercorporatetaxunification
wouldnotleadtoasortof'reversedistortion',benefit­
ingthestrongandhurtingtheweak.5.TheEconomicandSocialCommitteeregretsthat
theRudingCommitteedidnottakeamoreoveralllook
attheburdenweighingonenterprises,byincluding,for
instance,thequestionofprovisionsforretirement :of
course,thisisawelfarematterbutithasaconsiderable
effectontheprofitsbase,sincetheRudingCommittee
considersthattax-exemptprovisionsmayaccountfor
6%ofthebalancesheetinItalyandBelgiumandup
to27%inGermany. 9.TheRudingCommitteehasnotavoidedcertain
contradictions whichtheCommissionitselfwasobliged
tomention.Thus,afterclearlystatingitssupportfor
theprincipleofsubsidiarityandarguinginfavourof
harmonisation limitedto'theminimumnecessaryto
removediscrimination andmajordistortions',theRud­
ingCommitteefinallyproposestheadoptionofacom­
monsystemofcompanytaxationentailingbothaunifi­
cationoftaxbasesandaconsiderablenarrowingofthe
rangeofrates.6.TheESCwonderswhytheRudingCommitteehas
nothingtosayonessentialaspectsoftheverysubject
whichtheCommissionaskedittostudy.
Asregardsitsverypreciseproposalsforharmonising
therulesonthetaxbaseandcorporationtaxrates,the
RudingCommitteedidnotthinkitusefultoconsider
whatwouldbetheeffectofitsproposalsonMemberThediscrepancybetweentheRudingCommittee'spro­
posalsandrespectfortheprincipleofsubsidiarityisat

25.1.93 OfficialJournaloftheEuropeanCommunities NoC19/71
itswidestwhentheCommitteeproposesthatlocal
taxesbeincorporatedintoacorporationtaxrate'so
thatthecombinedrateoftaxfallswithintherangeof
30to40%prescribedbytheCommittee'.
10.DespitethesefewcriticismsoftheRudingCom­
mittee'sreporttheESChasmuchesteemforthequality
ofastudywhichwillremainareferencedocumentfor
researchers .
11.AsthecommentsontheCommission 'srec­
ommendations totheCouncilshow,theESCispleased
thattheCommissionhasgenerallytakenuppositions
whicharelesscategoricalandmoremeasuredthan
thoseintheRudingCommittee'sreport.
12.Taxationundoubtedlyposesthemostdifficult
problemsfortheachievementofeconomicandmonet­aryunion.TheruleofunanimityinCouncildecisions
actsasacurbtothedevelopmentofCommunitylegis­
lation—albeitessentialinfuture—butalsopreventsan
undueproliferationofrules,whichallMemberStates
arenotyetpreparedtoaccept.
TheESCwouldliketoseethehealthyprinciplesof
subsidiaritysafeguardedinthisareaandthenecessary
prudenceshownineverythingtodowiththeburden
borne,attheendoftheday,byalltaxpayers.
Itfeelsitshouldpointoutthattheunificationofcorpor­
ationtaxsystemsandtheharmonisation ofratesand
taxbasesshouldnotbeconsideredinisolationfrom
theeffectofsuchmeasuresonMemberStates'relations
withnon-ECcountries;thebilateralcontextofthe
renegotiationofagreementsconcludedwithcountries
wouldnotnecessarilybeadaptedtotheexistenceofa
harmonisedcorporationtax.
DoneatBrussels,24November1992.
TheChairman
oftheEconomicandSocialCommittee
SusanneTIEMANN
OpinionontheamendmenttotheproposalforaCouncilDirectiveonthechargingof
infrastructure coststoheavygoodsvehicles
(93/C19/22
On11November1992theCouncildecided,inaccordancewithArticle198oftheEEC
Treaty,toasktheEconomicandSocialCommitteeforaOpinionontheamendmenttothe
proposalforaCouncilDirectiveonthechargingofinfrastructure coststoheavygoods
vehicles.
Atits301stPlenarySession(meetingof25November1992)theEconomicandSocial
CommitteeappointedMrMorelandasRapporteur-General andadoptedthefollowing
Opinionbyalargemajority,with5votesagainstand2abstentions .
1.Introduction
1.1.In1986theCommissionputforwardadocu­
ment[COM(86)750final],concerningtheelimination
ofdistortionsincompetitioningoodstransport :survey
ofvehicletaxes,fueltaxesandroadtolls.TheEconomic
andSocialCommittee(*)agreedinprincipletotheobjectivesoftheCommissionwithregardtothefuture
taxationofgoodsvehiclessuchas:
—eliminationofdistortionsincompetitionwithinand
amongmodesoftransport,
—chargingoftheoveralleconomicinfrastructure
coststotheuser,
—sufficienttaxyieldforMemberStates,
—freeflowofgoodsandpassengerswithintheCom­
munity, (')OJNoC232,2.7.1987,p.87.