The standard rate at which companies in Ireland will be taxed in the period after 2005 will be announced by the Minister for Finance, Mr McCreevy, in tomorrow's Budget.
The Minister, here for a meeting of EU Finance Ministers, would not be drawn, however, on specific immediate reductions or whether the 2005 rate would be the 12.5 per cent suggested by the last Government or the 10 per cent promised when in opposition by Mr McCreevy, although sources suggest it will be the former. Even that will cost the Exchequer some £450 million a year in lost revenue.
The speed at which such levels of general taxation will be reached and the provision made for companies coming to Ireland after 2000 will depend on ongoing negotiations with the Competition Commissioner, Mr Karel van Miert.
But yesterday the Irish succeeded in watering down the text of a voluntary code of conduct on company taxation that they had feared would tie their hands in the van Miert talks.
The code provides for member states to submit their company tax regimes to a review by the Commission and member states. If the review found the regime to be "potentially harmful" to competition by providing advantages to particular sectors, the member state would undertake to reform the regime "as soon as possible".
Ministers agreed that this would normally mean five years - originally two - unless the state could make a case for a longer period. The meeting endorsed the code and an agreement on the taxation of bank deposits under which member states will either introduce a minimum withholding tax or provide records of non-resident deposits to states of origin. The Commission is likely now to produce directives implementing both provisions.
The meeting also saw a significant setback for the British Chancellor, Mr Gordon Brown, over his attempts to persuade partners to let non-euro countries play a full role in setting monetary policy guidelines for the euro.
Ministers deadlocked on the setting up of a committee of the "in" states which would provide political guidelines for the European Central Bank, with the French most adamant in insisting that non-euro countries should not be allowed to participate in the direction of a currency of which are not a part of. Ireland, on the other hand, has considerable sympathy with the British view that the treaty requires groups than are more than informal gatherings to be inclusive. Mr Brown yesterday promised to block any non-inclusive outcome and was warning that French proposals would split the union, a view echoed by another "out", the Swedish Finance Minister, Mr Erik Asbrink.
Late last night even a Commission-sponsored compromise appeared to be going nowhere - it provided for the Commission itself to act as a conduit for information to "outs" on discussions in a special sub-committee of the Council of Finance Ministers. The sub-committee would not be allowed to undermine the council.
The issue will now have to be settled at the summit in a fortnight, but it is difficult to see an outcome which allow the British Prime Minister, Mr Tony Blair, to claim he is at the heart of Europe's leadership.
Ministers did, however, reach agreement on the funding of an information campaign on the euro - Ireland will get £500,000 over two year towards a £1 million campaign.
