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Merkel and Sarkozy at a press conference earlier this month Gero Breloer/AP/Press Association Images
Corporation Tax

France and Germany in new plan to harmonise corporation tax - reports

Ireland looks likely to come under heavy pressure over our corporate tax rate, after details emerged of a new set of proposals from the EU power-brokers.

THE CO-ORDINATION OF corporate tax rates between EU countries is among the key points of a new Franco-German plan for eurozone growth, according to reports.

The EU’s two major powers are also calling for the long-mooted ‘Tobin tax’ on financial transactions, the redirection of some EU bailout money, and greater tax harmonisation across the board.

According to, the six-point set of proposals – due to be put to European leaders during a summit at the end of the month – includes a “common consolidated corporate tax base”.

In practice would mean all European countries would calculate corporate tax using the same formula.

Up to now, the Government has strongly resisted EU pressure to raise Ireland’s 12.5 per cent corporation tax rate, which is seen as a key attraction for multinational companies. French president Nicolas Sarkozy has reportedly suggested in the past that the interest rate on Ireland’s bailout could be reduced in return for a compromise on corporate tax.

The new revelations appear to vindicate claims by Fianna Fáil leader Micheál Martin, who said in December that new EU fiscal agreements would leave Ireland vulnerable on corporation tax.

The Daily Telegraph reports that the confidential plan calls for EU countries to “accelerate” the process of tax co-ordination as a way to aid growth across the eurozone, and says France and Germany plan to harmonise their own corporate tax rates to drive reform.

Martin: EU deal leaves Ireland vulnerable on corporation tax>

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