The EU Commission may propose a mandatory common consolidated corporate tax base (CCCTB) in its action plan to be released next month, Commission Vice-President for the Euro and Social Dialogue, Valdis Dombrovskis, said May 27.
Speaking to reporters after a meeting of the EU College of Commissioners, Dombrovskis confirmed that the CCCTB, first proposed in 2011, will be relaunched on June 17 as part of the EU action plan on corporate taxation.
Unlike the 2011 proposal, which allows companies to opt to use the system, the Commission may require mandatory use of the CCCTB to better combat tax avoidance, Dombrovskis said.
“It’s clear that . . . companies which are engaged in aggressive tax planning are not going to be the ones [to] voluntarily opt in [the] CCCTB system — that’s why we are coming with this compulsory approach,” he said.
Dombrovskis predicted that negotiations on consolidation will be difficult, and said that since the CCCTB must have the support of all EU members, the proposal must be “realistic.” He also said that it is not yet clear if the Commission will re-propose the 2011 CCCTB with amendments, or if it will be a completely rewritten.
Dombrovskis also said that the EU College of Commissioners is considering amendments to the parent-subsidiary directive and the interest and royalties directive that would ensure effective taxation of cross-border transactions.
“Not everything which is subject to taxation is effectively taxed,” he explained.
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