Hayes welcomes Commission’s new 2-step approach on CCCTB
Brian Hayes MEP welcomed the fact that the European Commission will shortly release a new package on CCCTB but said that consolidation of a common tax base is a step too far. The Commission is planning to publish their re-launched CCCTB package next week which includes a 2-step approach, which will firstly focus on developing a Common Corporate Tax Base (CCTB) and secondly adding the consolidation element.
“The Commission’s two step approach to CCCTB is the right approach. It is welcome that the Commission will finally re-launch an initiative on CCCTB but several concerns remain. We should be ready to engage with other Member States and the European Commission on a Common Corporate tax base (CCTB). A Common corporate tax base has the potential to address tax divergences in the EU but it must be in line with the OECD BEPS principles.
“Consolidation of the tax base, however, is a bridge too far and effectively represents wide-scale tax harmonisation through the back door. Consolidating a multinational’s profits across its entities in different Member States according to a complex formula is not the way to proceed. This cuts across how Member States set their tax rates and policy and is a roundabout way of addressing cross-border tax losses.
“We cannot underestimate the challenge of getting agreement on the Commission’s new proposal. This is going to take a long time. It failed on one occasion already but there is an onus on the Commission now to understand the concerns that various Member States had during the first CCCTB attempt and address these issues.”