Brussels seeks reform of profits tax

A study by the European Commission concludes that wide discrepancies in the company tax systems of Member States put Europe-based companies at a disadvantage to their competitors in other parts of the world. Frits Bolkestein, European Commissioner for the Internal Market, presented plans to the Commission on 23 October 2001 which would reform taxation of corporate profits in an effort to encourage cross-border investment and cut costs for companies that operate in more than one European country. Mr Bolkestein, however, did not feel that complete harmonisation of company tax systems would be a solution. He is thought to favour a system whereby European companies could choose to join a EU-wide company tax scheme or keep paying their national rates.