The EU Commission on October 8 launched a public consultation on an EU-wide common consolidated corporate tax base (CCCTB). Through the consultation, the Commission hopes to gather stakeholder input before it publishes its proposal on the topic.
In announcing the consultation, Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said he remained convinced that the CCCTB “is the best instrument for fighting cross-border tax abuse and tax fraud and for easing the administrative burden on companies operating in the EU.”
Specifically, the Commission seeks input on the following questions:
- To what extent the CCCTB could function as an effective tool against aggressive tax planning, without compromising its initial objective of making the Single Market a more business-friendly environment;
- Which criteria should determine the companies that will be subject to the rules of a mandatory CCTB/CCCTB;
- Whether non-qualifying companies should still be given the possibility to opt for applying the common rules;
- Whether a ‘staged’ approach, whereby priority will be given to agreeing the tax base before moving to consolidation, would be a preferable way forward;
- Whether, in the short-term, it would be useful to agree common rules for implementing certain international BEPS-related aspects of the common tax base based on the current proposal until the Commission adopts the new (revised) CCTB/CCCTB proposal;
- How the debt bias issue should be addressed;
- Which types of rules would best foster R&D activity;
- Whether a cross-border loss relief mechanism aimed to balance out the absence of the benefits of consolidation during the first step (CCTB) could help in keeping the business in the CCCTB;
Feedback on the consultation requested by January 8, 2016.
Implementation of a CCCTB was called for in the Commission’s Action Plan for Fair and Efficient Corporate Taxation, released in June.
Because EU negotiations on the 2011 CCCTB proposal stalled, the Commission decided to propose in its action plan a CCCTB that is more likely to secure EU agreement. The new proposal will set out a common set of rules to calculate taxable profits in the EU; however, unlike the 2011 proposal, negotiations on the contentious issue of consolidation are postponed until after EU states agree to other aspects of the plan.
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