WRITTEN QUESTION E-3150/01 by Brice Hortefeux (PPE-DE) to the Commission. Company taxation.
Date: 2001-11-14
Institutions: European Parliament, Provisional data
Subjects: basis of tax assessment, corporation tax, enlargement of the Union, single market, tax harmonisation

20.6.2002

EN

Official Journal of the European Communities

C 147 E/115

(2002/C 147 E/119)

WRITTEN QUESTION E-3150/01

by Brice Hortefeux (PPE-DE) to the Commission

(14 November 2001)

Subject: Company taxation

Despite the single market, despite the euro, differences in company taxation in the 15 Member States
persist and are even increasing. This trend is likely to become even more marked with the enlargement of
the Union. Significant disparities + of up to 30 % + exist in the effective rate of company taxation at EU
level. Econometric modelling suggests that these disparities are mainly attributable to deviations in national
statutory tax rates rather than to differences in the tax base.

Given the persistence of these disparities which cost economic operators a great deal and undermine

1.
their competitiveness, does the Commission envisage presenting a proposal?

Does the Commission intend to tackle the most blatant obstacles to the single market,

i.e. the
2.
network of bilateral double taxation agreements, rising administrative costs and the absence of tax rules
which make the ‘European company’, adopted last month after three decades of negotiation, an empty
shell?

Answer given by Mr Bolkestein on behalf of the Commission

(21 December 2001)

In its Communication ‘Towards an Internal Market without tax obstacles + A strategy for providing
companies with a consolidated corporate tax base for their EU-wide activities’ (1) of 23 October 2001 the
Commission sets out a comprehensive strategy to overcome the existing problems for the Internal Market
due to the co-existence of 15 different tax systems in the Community. This Communication supplements
and builds on the Commission’s study ‘Company taxation in the Internal Market’ (2).

In this Communication, the Commission draws attention to the fact that effective tax rates’ differentials are
high inside the Community and the main tax driver for these differentials is the overall national tax rate.
At the same time, the Communication underlines that the Commission’s study has not analysed the
evolution of effective tax rates over time and the effects of tax competition. Neither has the computation
assessed the size of possible welfare losses associated with the existing differences in effective tax rates of
corporate taxation in the Member States. Therefore, at this point in time, there is no convincing evidence
for the Commission to recommend specific actions on the approximation of the national corporate tax
rates or the fixing of a minimum corporate tax rate.

The above-mentioned Communication sets out in detail which actions need to be and can be realistically
carried out in order to tackle the company tax obstacles to cross-border economic activity in the
Community. These cover,
inter alia, all the problems singled out by the Honourable Member. The
Commission will pursue these actions as a matter of priority, which, unless ‘enhanced co-operation’ is
eventually applied, all require unanimous approval by Member States.

(1) COM(2001) 582 final.
(2) SEC(2001) 1681.