Germany Continues Common Corporation Tax With France

; posted on
March 6th, 2018

German Chancellor Angela Merkel announced during her weekly podcast that Germany will push forward the cooperation regarding “Common Corporation Tax Plan” with France. The collaboration between the two countries is becoming closer following the US tax reform by President Trump and Brexit.

Common Corporation Tax Project

The notable decline in US corporate tax rate worries the EU member states about the attractiveness of their tax systems, and the ‘Common Corporation Tax with France’ project is Germany’s current resort to maintain its relative competitiveness. “That means when we decide on a joint corporation tax assessment basis for France and Germany, we will also consider the realities that are unfolding in America,” according to Merkel. This project is not going to lighten the tax burden of corporate taxpayers, however, it may make it easier to run cross-border business in Europe.

France-Germany Collaboration

After the first version of common consolidated corporate tax base proposal in 2011, France and Germany proposed in 2015 the “minimum corporate tax rate” system, which intends to apply a basic(low) tax rate in the Europe to crack down low tax countries such as Ireland and Luxembourg. This plan, however, has never been put on the ground.

Sources: The Wall Street Journal, Reuters

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