Interesting op-ed in today’s Wall Street Journal on the Marks & Spencer case [blogged here]: A Case for Tax Harmonization, by Laszlo Kovacs (Commissioner for Taxation and Customs Union of the European Union):

My main priority in the direct tax field, therefore, is the creation of a common consolidated corporate taxation base in the EU. If companies were allowed to apply a single EU-wide set of rules for company taxation purposes, they would not encounter most of the tax obstacles that they currently face when they do business in more than one member state. A single set of rules would lead to a substantial reduction in compliance costs.

A very good example of the sort of obstacle we hope to remove is the issue of crossborder tax relief for losses. We believe that it does not make sense to tax an enterprise’s profits in one country but at the same time refuse to allow offsetting losses made in another member state. Last week’s ECJ decision in the Marks & Spencer case illustrates this perfectly. The court recognized that there is a problem with the current U.K. practice with respect to EU law, as it prohibits offsetting losses made by subsidiaries in other EU countries from the parent company’s group profit in Britain. Member states can apply such a prohibition only where subsidiaries can offset losses in the country where they are established. The European Commission welcomes the decision.