Corporate Taxation in the EC:
The Process of Corporate Tax Harmonisation in the EC
2001 Dr Jean-Philippe Chetcuti. All Rights Reserved.
4. Why several of the Commissions proposals failed
For a number of reasons[clii], the Commission has attempted to harmonise various differences between the national corporate income tax systemsand to remove discriminatory tax treatment by national tax systems of international investment activities.
Harmonisation proposals have concerned several national aspects, including the systems of withholding tax on dividends and corporate taxation, the carry-over of losses and the determination of taxable profits of enterprises. They also concerned international aspects including cross-border mergers, parent-subsidiary relations, the elimination of double taxation in the case of adjustments of transfer pricesand mutual assistance in direct taxation. In 1989, of all these proposals, only the one regarding mutual assistance had been adopted, and the reasons for this lack of success are to an extent understandable.[cliii]
Unanimity was, and still is, required for the adoption of tax harmonisation measures, and with the gradual erosion of MS sovereignty in other areas, especially in indirect taxation, there is an obvious reluctance to relinquish more autonomy.
Another reason is that harmonisation of corporate income taxes would inevitably result in a decrease in tax revenue for high tax countries such as Denmark, which have been reluctant to support wholeheartedly the Commissions proposals.[cliv] It is therefore understandable that countries who stand to lose by further harmonisation will hinder further progress and stall the process of integration in this area.
What is sure is that, if it wants its agenda to go on and its proposals to become law, the Commission would do well to tame its enthusiasm and not try to eat too much at one go. 
