The European Commission says several EU countries will adopt a joint method of taxing company profits if support for EU-wide harmonisation still proves elusive by the end of 2007.
The EU body wants firms operating across borders to be able to file tax returns based on a single system to save the cost of complying with different national regimes. A common tax base would allow a company to offset losses in one member state against profits made in another - a principle the European Court of Justice backed last year in a case brought by British retailer Marks & Spencer.
Revenue would be shared among member states according to how much of a company's business was conducted on their turf, and EU Tax Commissioner Laszlo Kovacs wants to table a formal proposal by the end of 2008.
Ireland and Britain are opposed, fearing it will lead to harmonised corporate tax rates. Tax changes need the support of all 25 EU members, though a third or more states could introduce a common base in their own countries under the EU's enhanced cooperation rules.
Kovacs said a common tax base would be optional, but this did not rule out the system becoming mandatory later. EU finance ministers are to discuss the topic informally at the weekend and reach a view in June.
The EU's internal market commissioner, Irishman Charlie McCreevy, publicly opposes his colleague's tax plan, but Kovacs said the Commission overall was broadly in favour.
