Speaking to the press after the meeting of ECOFIN on 23 May, European Commission vice-president Valdis Dombrovskis gave an update on the Council’s debate on a directive for an EU common consolidated corporate tax base (CCCTB). The proposal involves a two-stage approach, stage one dealing with the rules for calculating a common corporate tax base, leaving consolidation for the second stage.
‘We take note of the wish of some member states to have broader flexibility and are ready to carry on the discussion,’ Dombrovskis said.
‘There was a broad consensus on this general principle today, but obviously more work is needed to be done in the months to come, in order to reach an agreement,’ he added.
The BEPS Monitoring Group (BMG) has published a paper setting out its comments on the CCCTB (see http://bit.ly/1xyP62V). While agreeing with the approach to taxing multinationals as unitary firms, the BMG believes the aim should be to create a level playing field in relation to tax on corporate profits, not only within the EU, but worldwide, attributing to the EU as a whole a portion of the worldwide profits reflecting the multinational’s actual activities within the EU.
The paper also proposes a ‘compensation mechanism’ to deal with issues such as the destination-based cash flow tax mooted in the US, which discriminates between imports and exports.
The BMG dislikes the Commission’s two-stage approach and the proposed ‘super-deduction’ for R&D expenditures and the ‘allowance for growth and investment’. It argues that ‘it is better to define the tax base broadly, allowing scope for cuts in the rate … than to build in selective and distorting special allowances’.
Speaking to the press after the meeting of ECOFIN on 23 May, European Commission vice-president Valdis Dombrovskis gave an update on the Council’s debate on a directive for an EU common consolidated corporate tax base (CCCTB). The proposal involves a two-stage approach, stage one dealing with the rules for calculating a common corporate tax base, leaving consolidation for the second stage.
‘We take note of the wish of some member states to have broader flexibility and are ready to carry on the discussion,’ Dombrovskis said.
‘There was a broad consensus on this general principle today, but obviously more work is needed to be done in the months to come, in order to reach an agreement,’ he added.
The BEPS Monitoring Group (BMG) has published a paper setting out its comments on the CCCTB (see http://bit.ly/1xyP62V). While agreeing with the approach to taxing multinationals as unitary firms, the BMG believes the aim should be to create a level playing field in relation to tax on corporate profits, not only within the EU, but worldwide, attributing to the EU as a whole a portion of the worldwide profits reflecting the multinational’s actual activities within the EU.
The paper also proposes a ‘compensation mechanism’ to deal with issues such as the destination-based cash flow tax mooted in the US, which discriminates between imports and exports.
The BMG dislikes the Commission’s two-stage approach and the proposed ‘super-deduction’ for R&D expenditures and the ‘allowance for growth and investment’. It argues that ‘it is better to define the tax base broadly, allowing scope for cuts in the rate … than to build in selective and distorting special allowances’.
