08 January 2016

EBF/ FEE: Response to the EC's public consultation on relaunch of the CCCTB

EBF

The idea of a CCCTB across the EU would be difficult to achieve absent a minimum level of harmonization of the accounting rules among EU Member States beforehand. A number of technical challenges arise from the diversity of local generally accepted accounting principles applicable at solo level. Computing the tax base should be as simple as possible and should therefore entail as little departures as possible from the underlying accounting treatment. This prerequisite is not met in the current stand, considering the initial proposal of the Commission of 16 March 2011.

The CCCTB should remain optional for all EU companies, irrespective of their status.

A phased-in approach would facilitate an agreement on the tax base, which could be carried out as a stand-alone project, independent from the consolidation project.

If no compromise can be realistically reached on consolidation among Member States, the appropriateness of the CCCTB as a holistic solution to profit shifting should be perhaps reassessed in the first instance and instead more targeted alternatives could be considered on the basis of the relevant OECD recommendations. A common approach regarding the implementation of the BEPS action plan at EU level would certainly help creating a common level playing field among Member States against base erosion and profit shifting, but allowing for differences in the established national tax systems when considering the options provided for under some of the BEPS recommendations.

A priority should be given to elements that would foster a genuine level playing field on base erosion and profit shifting globally so as to avoid the relocation of business activities outside the EU.

In addition, the principle of a cross-border loss relief would be welcomed. 

Full response

FEE

The EC has relaunched the proposals (first put forward in 2011) for a CCCTB as its main tool for fighting against aggressive corporate tax planning, while contributing to a favourable investment climate.
In its response, FEE emphasises that the CCCTB should be something that helps bring the EU together and should not just be seen as an anti-avoidance measure. The CCCTB could be also effective in making tax competition between Member States more transparent though. Furthermore, FEE stresses the importance of considering the CCCTB system within the developing international tax environment to ensure maximal consistency, such as with the OECD’s anti-BEPS project.

Full response

© EBF