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To: Hawkmoon who wrote (25243)	1/2/1999 4:13:00 PM
From: goldsnow	Read Replies (1) \| Respond to of 116912

World: Europe New row over European tax Europe still divided one day after the official launch of the euro As preparations continue for trading in the new European currency, a fresh row is emerging over tax harmonisation. France and Germany are on one side, supporting tax reform; the UK is on the other, opposing European change and interference. When business resumes on Monday, the euro will replace financial market trading in the national currencies of 11 European countries. Britain is not one of those countries. UK Rebuff Comments by Germany's minister for Europe, Guenther Verheugen, that tax co-ordination in the EU is inevitable, and that "target zones" for corporation tax could ease problems of unfair tax competition have met with an immediate rebuff from the UK Government. A UK Treasury spokesman indicated a willingness to veto any attempt to harmonise personal or corporate taxes. "Direct taxation is a member state competence," he said. Britain had already protested in November when Germany's finance minister, Oskar Lafontaine, brought up the idea of harmonising taxes across the EU. The current disparity between income and corporation tax between member states is central to UK critics' arguments against tax harmonisation. Germany and France want revenue harmony because they are worried that if they have different levels of taxation then jobs will move to countries where the best deal is offered. As neighbouring countries they believe it makes sense to co-operate. Chancellor Gerhard Schroeder has complained that countries with lower tax rates hold a competitive advantage in the single market. Germany wants the whole of Europe to withhold tax on savings - a policy opposed by countries like the UK and Luxembourg. At the moment there is a proposal for a minimum level of tax on savings and investments. The European Commission is also proposing a minimum energy tax, and a minimum tax on artists and other royalties. news.bbc.co.uk