Europe: New developments on the CCCTB

On 27 May 2015, the European Commission held an orientation debate on how to develop a fairer and more efficient corporate tax system. Vice-President Dombrovskis of the European Commission held a speech afterwards to point out the main topics that were discussed:

 International tax rules date back to the first half of the 20th century and are based on an industrial economy that differs from our current mobile and digital economy. International tax rules should fit into the current global economy and therefore, corporate taxation is high on the agenda of the European Commission

  • The European Commission will focus on three things:

1. A growth friendly corporate taxation which should support the recovery of the economy.

2. Companies with business abroad should pay their fair share. The Vice-President points out that this is particularly important because small and medium enterprises have to compete in the same market, which means that a fair level playing field has to be guaranteed.

3. Increasing tax transparency.

  • The European commission discussed the principles that should underline corporate taxation. They agreed on the need to combat tax avoidance and the need to bring taxation in line with the business activities which are carried out
  • A cornerstone of the abovementioned approach is the reiteration of the 2011 proposal for a Common Consolidated Corporate Tax Base (CCCTB). The Vice-President acknowledges that a full consolidation of the tax base across Europe is the most difficult part
  • When the CCCTB is relaunched, the European Commission will reconsider if a purely voluntary use of the CCCTB underpinning their 2011 proposal is sufficient to fight tax avoidance. Therefore, they will consider to adapt a compulsory approach

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