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EU Corporation Tax Floor Proposal

29th May 2015

The UK currently has one of the lowest corporation tax rates within Western Europe, at just 20%. However this could change, as Germany and France (both of whom have considerably higher rates at 30-33% and 33-36.6% respectively) push forward plans to introduce a minimum corporation tax rate across the EU.

Whilst the aim of this tax harmonisation may be to target other countries such as Ireland and Luxembourg (that have been heavily used by online retailers in particular to avoid tax), Britain would almost certainly suffer as well. An increase in the corporation tax rate would make the UK less attractive not only to companies looking to set up offices within Europe, but also to those who already have a base within the country.

David Cameron would oppose these plans if they were to be voted on as, in direct contrast, he instead has called for sovereignty to be returned to EU member states.