27th September 2012


The decision by the European Commission to take Britain to court in a row over corporate tax rules is a blatant attempt to extend the EU's powers into matters of member-state tax law.

Corporate taxation - like other matters - is something for individual national governments to decide. It should be exclusively a member-state competency and the EU has no right to determine our tax laws.

The rift between Britain and Brussels stems from a decision by the European Court of Justice seven years ago in a case brought against the British Government by retail giant Marks & Spencer.

The stores-conglomerate tried to reduce its UK tax bill by offsetting losses incurred by its failing subsidiaries in Continental Europe. Both HM Revenue and Customs and the British Courts ruled the attempt illegal, but M&S then took its case to the European Court of Justice - complaining that the UK's stance was against single market regulations.

Britain lost and was ordered by Brussels to amend its tax laws accordingly.

The UK Government has initiated relevant legislation, but the Commission's decision to begin infringement proceedings today suggests that it considers the response inadequate.

At the heart of this is the question of who sets British taxes - ourselves or the EU.

This could mean an extremely damaging loss of revenue to the exchequer at a time when Britain is striving so hard to tackle Labour's crippling deficit.

The original decision by the ECJ was a piece of activism, an attempt to push the reach of EU legislation into areas where it was never meant to go and should not be allowed.

Now the Commission is supporting this power-grab by threatening court action. They should keep out of the domestic affairs of member states and keep a lid on their ambitions to control our lives.

The original decision by the ECJ was a piece of activism, an attempt to push the reach of EU legislation into areas where it was never meant to go and should not be allowed.

Now the Commission is supporting this power-grab by threatening court action. They should keep out of the domestic affairs of member states and keep a lid on their ambitions to control our lives.

 

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