MPs discuss EU common corporate tax behind closed doors

THE HOUSE finance committee yesterday discussed behind closed doors the European Council’s proposal for a unified corporate tax across the EU.

The discussion took place in the context of council of Europe’s suggestions on a national reform programme – a set of recommendations for the economy.

“The meeting was behind closed doors because it involved sensitive issues about Cyprus as a financial centre,” the finance committee’s acting president, DISY’s Christos Stylianides said yesterday.

Franco-German proposals for a universal tax rate has been making Cyprus along with other member states jittery.

Reports have been doing rounds that the duo is looking to push for an EU-harmonised rate of 17 per cent, a figure much higher than Cyprus’ current 10 per cent tax rate.

EU president Herman van Rompuy subsequently tempered that talk by speaking of a less offensive ‘common tax base’ but the issue is a contentious one with a number of member states, including Cyprus, keen to preserve their taxing independence.

Stylianides suggested the possibility of agreements with similarly minded countries “since nine national parliaments have submitted proposals which in effect come out against that suggestion,” he said.

He was referring to the European Council of Europe’s Plus Pact commitments which talk of a common corporate tax base.

The Pact pushes for a common tax as “a revenue neutral way forward to ensure consistency among national systems”, the European Council’s report said in late March this year.

The pact gets the ‘Plus’ in its title because it includes countries outside the EU.

Finance Committee’s president, DIKO’s Nicolas Papadopoulos said that it was a “basic principle” that under no circumstances should Cyprus’ taxing system change as it makes the island attractive to foreign investors and should be safeguarded.

There was no talk of figures or percentages in the meeting, Stylianides said.