EU tax commissioner Laszlo Kovacs said he has no plans to harmonise corporate tax rates across Europe or to eliminate the UK’s zero value-added tax rate for such items as food and children’s clothing.

“Let me make it clear that we are not going to harmonise the corporate tax system – far from it,” Kovacs said in an interview with Thomson Financial News.

“We are not going to touch corporate tax rates,” he said.

Rather, the European Commission is seeking to harmonise the method of calculating the tax base.

“Today, there are 27 different methods of calculating the tax base,” he said. “We want to introduce one single method of tax base which could reduce the compliance costs for companies, which could reduce the administrative burdens, which could provide transparency, and which would also provide conditions for consolidation.”

On his package of value-added tax reforms that was blocked at the EU finance ministers’ meeting in June, Kovacs said he is optimistic of persuading Luxembourg and Malta to drop their opposition so as to reach a legally-binding deal by the end of the year.

He has agreed with Portuguese finance minister Fernando Teixeira dos Santos, whose country holds the EU presidency, “that we will make all the necessary efforts to convince Luxembourg and Malta to say yes to the proposal, and we have hopes that we will succeed”.

Luxembourg objects to the commission’s attempt to bring the bloc’s VAT system up to date with the age of electronic commerce from January 2010.

Numerous companies, such as AOL, Apple and Skype, have set up centres in Luxembourg, lured by the country’s 15 per cent VAT rate, the lowest in the EU.

Kovacs said he is prepared to visit Luxembourg Prime Minister Claude Juncker to discuss the issue, while coordinating closely with the Portuguese presidency.

“I have not proposed any concrete dates, just my intention, and the response has already come; and the response was positive, which I expected,” he said.

Equally, he will talk to the Maltese authorities about their concerns regarding maritime services.

Several countries, particularly the UK and Ireland, are strongly opposed to the commission’s mooted common consolidated corporate tax base (CCCTB) on the grounds that it could undermine national tax sovereignty.

But Kovacs said member States would not be obliged to adopt the system, but instead they could run it alongside their national tax regimes.

“We want the common base to be optional because its designed for use in the (EU’s) internal market, so there is no sense in applying it to companies that want to remain in the framework of the domestic market,” he said.

He also stressed that the plan is just a concept at this point, with legislative proposals not due to be tabled before mid-2008.

Then countries will be in a position to say “yes” or “no” in more concrete terms and give more concrete arguments because today we have been discussing only a concept he said.

On the equally sensitive issue of the UK’s zero VAT rate for such goods as food and children’s clothing, he said he “was very shocked” to see British press reports last week saying the commission plans to eliminate this.

He said last week’s commission report on the impact of reduced VAT rates had nothing to do with the zero rate.

“It is a fact that the UK applies a zero rate but this was not about putting an end to it or taking it away from them,” he said.

The commission’s aim was to stimulate debate among EU finance ministers with a view to making the system fairer and more flexible.

“I simply don’t think that it is fair that some of the old member States since 1992 have applied zero rates to different goods, while zero rates were categorically refused to the new member States,” he said.

“It goes against the principle of equality of member States, so either we should abolish some of these privileges or we should extend these privileges to the new member States,” he added.

Asked about France’s push to be allowed to apply a VAT rate of 5.5 per cent to the restaurant trade rather than the current 19.6 per cent, he noted that numerous other member States are entitled to set lower VAT rates for the catering sector.

In the case of France, “it was simply vetoed by one member State, without even providing any reason,” he said referring to the EU requirement for unanimity over tax decisions.

“I believe that if half the member States have access to reduced rates on restaurants, it should be granted to the other half of the member States,” he said.

Portugal had earlier opposed the e-commerce provision as Madeira, like Luxembourg, benefits from the current system, but the commissioner noted a change in the country’s stance now that it holds the presidency until the end of the year.

When Kovacs had preliminary talks on the issue with Fernando Teixeira dos Santos in mid-June, ahead of the presidency, he was already “very firmly committed to reaching an agreement”.

Two weeks later, during the commission’s traditional meeting with the new presidency, “he explicitly confirmed that he would do his best to reach a compromise and to achieve the agreement”.

Kovacs expects the package to be on the agenda of the November gathering of EU finance ministers, which is already due to focus on several other tax issues.