Taxing multinational enterprises: evaluating of the proposals of the European Commission

Last October the European Commission published a study on corporate taxation that rejected a harmonisation of tax rates. Instead, it proposed a uniform, consolidated basis of tax assessment for enterprises within the EU that engage in cross-border activities. For Prof. Gerold Krause-Junk, University of Hamburg, this uniformity demands "not only a great deal of preparation and imagination, but also willingness on the part of the member states. Some EU countries may regard this as painful loss of autonomy. This instrument for determining the tax base is used by many countries for setting tax incentives. It is high time, however, that European interests take priority over national interests also in the area of enterprise taxation." Prof. Moris Lehner, University of Munich, welcomes the Commission's proposals but would like to see "specific Community competence in the area of direct taxes". For Dr. Alfons J. Weichenrieder, University of Vienna and CESifo, the proposal raises more questions than it answers. In particular it fails to take aspects of tax competition into consideration.