Common Consolidated Corporate Tax Base

From ACT Wiki
Revision as of 16:49, 11 July 2018 by Doug Williamson (Talk | contribs) (Update 'double' to 'dual'.)

(diff) ← Older revision | Latest revision (diff) | Newer revision → (diff)
Jump to: navigation, search


The Common Consolidated Corporate Tax Base (CCCTB) is a European Commission proposal (March 2011).

CCCTB would be a single set of harmonised rules for calculating taxable profits, to replace the current different, national corporate tax rules in each EU Member State. Companies or qualifying groups of companies operating within the EU would use the proposed rules to calculate their taxable profits and losses, and file a single consolidated tax return for the whole of their EU activity. The calculated taxable profits would be shared among Member States on a formula, perhaps related in certain proportions to turnover, wage bill, number of employees, physical capital and such. Each Member State would then collect tax at its own national rate on its portion of the total profits.

A purpose of the common tax base would be to make tax competition among Member States more transparent.

Critics of harmonisation see base differences as socially useful competition among Member States, allowing States differently to influence behaviour of companies as well as influencing tax revenues. Such critics also tend to value competition on tax rates. The critics view both these factors as encouraging governments to be more efficient.

Supporters of harmonisation see base differences (and often rate differences too) as distortions, encouraging damaging corporate tax arbitrage between competing jurisdictions.


Agreement on tax base harmonisation has been a slow process.

Supporters of harmonisation continue to argue the case, especially before their domestic electorates. Supporters of harmonisation have also proposed the introduction of a common tax base among a voluntary coalition of willing Member States (enhanced co-operation) if agreement among all Member States is not forthcoming.

For example, then French President François Hollande [1] said in 2014 that he wanted "[tax base] harmonisation with our largest neighbours" by 2020.

The Commission presented a strategy to re-launch the CCCTB and public consultation was undertaken in 2015.

The aim of the re-launch was to kick-start negotiations on the CCCTB in Council, which had stalled largely due to the scale of the proposal.

The Commission came forward with a new proposal to revive the CCCTB, based on two key changes:

  1. A mandatory CCCTB - to improve its capacity to prevent profit shifting.
  2. The CCCTB to be introduced through a step-by-step approach - to make it more manageable for Member States to agree.

The European Commission re-launched the common consolidated corporate tax base (CCCTB) project in a two-step approach, with the publication on 25 October 2016 of two new interconnected proposals:

  • on a common corporate tax base (CCTB), and
  • on a common consolidated corporate tax base (CCCTB).

Building on the 2016 CCTB proposal, the 2016 CCCTB proposal introduced the consolidation aspect of this dual initiative.

The proposal was adopted in the ECON committee on 21 February 2018. Subsequently on 15 March 2018, the European Parliament voted to establish a common consolidated corporate tax base (CCCTB) in the EU and also approved a measure establishing a common corporate tax base (CCTB). The next step is consideration by the EU Council and Commission.

See also

Other links