The framework agreement which was put in place at the end of last year under the French Presidency on indirect tax harmonisation does not envisage decisions until 1991 on the major issues. Nevertheless, in the course of the Irish Presidency we have made useful progress in preparing the way for the decisions to be taken on a number of topics including the scope of the reduced VAT rate; and the harmonised rates of excise to apply to alcohol, tobacco and mineral oils. Because of the sensitive budgetary and economic implications for all countries, progress on these issues is difficult. However, the groundwork is being laid for resolution of the outstanding issues within the agreed timetable.
In order to facilitate advance planning by both businesses and tax administrations, I have been pressing the Commission to bring forward its proposals for the VAT control arrangements to apply to imports and exports of goods when frontier controls are removed. While the production of the proposals took longer than expected, they were formally unveiled by the Commission at the meeting of Finance Ministers which I chaired in Luxembourg on 11 June. We will be initiating a detailed examination of the proposals by experts later this week with a view to progressing them before handing over to our Italian colleagues.
Deputies will be aware that at that meeting of the Council of Ministers on 11 June the Irish Presidency achieved a major success in securing the agreement of the Council for a package of three corporation tax measures aimed at encouraging co-operation between companies in different member states. The package had been under discussion among member states for some 21 years. This is recognised as a very substantial success for the Presidency and the Community in the run-up to 1992.
Finally, in regard to the budgetary difficulties posed for Ireland by indirect tax approximation, the study being undertaken by the EC Commission at my initiative is now well under way. The study will examine and report on measures to facilitate our full participation in the process of completing the internal market. It is hoped that the study will be completed shortly.