Tuesday, May 02, 2006

ECJ - the anti-tax competition agenda

The Advocate General's opinion in the Cadbury Schweppes case was published today. This latest dent in the UK's rights to set its own tax laws concerned the choccie and soft drink makers moving activities to Ireland to benefit from the lower tax rate, and whether the UK rules that seek to subject income arising in tax-havens to UK tax are against the EU Treaty Freedom of Establishment. The European Commission was on the opposite side to the UK government in this case. Guess what, the AG held in the Commission's favour!

AG Leger, pictured here, showed a typical Brussels statist attitude as he sought a way to attack tax competition. To quote -
  • "It may be regrettable that [tax] competition operates between Member States in this field without restriction"
  • "The fact that that tax system may also be classified as State aid incompatible with the common market...."
  • "However, the harmful effects of a total absence of harmonisation of the rates of taxation of company profits call, as we have seen for a political solution..."
The TaxCutter suspects his views are all too prevalent among Brussels judiciary. The most harmful tax measures in the EU are the stonking tax rates applied to income and corporate income by Old Europe, causing the EU to have the lowest economic growth in the OECD. Indeed, just what is the UK doing having a tax system that treats Ireland like it was some Cayman style offshore-tax haven.


At 2:46 AM, Blogger Serf said...

Competition is never harmful and least so in Tax matters


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