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MADRID, Feb 3 (Reuters) - Europe should work on harmonising the basis for corporate taxation to increase competitiveness, emulating the value-added tax (VAT) bands already in place, German Chancellor Angela Merkel said on Thursday.
"Regarding the corporate tax, Europe has worked for years on getting at least a basis for it. First of all it's about what the tax will be levied on, not even the tax rates yet," Merkel told a news conference in Madrid.
"It is desirable that first of all we get to a harmonisation of the basis," she added after a meeting with Spanish Prime Minister Jose Luis Rodriguez Zapatero.
The European Union currently imposes VAT at two levels "and that has worked out reasonably. But we must not remain standing still, we must push ahead on this path step by step," she said in Madrid, speaking through an interpreter.
Merkel also said Spain was on the right road with its crisis measures and pledged the euro zone would take crucial steps by end of March to strengthen economic stability and competitiveness. [ID:nLDE7122AT] (Reporting by Annika Breidthardt and Stephen Brown in Berlin; Editing by Ruth Pitchford, Ron Askew)