Opposition Across Europe Stalls CCCTB Plans
"The EC's proposed Common Consolidated Corporate Tax Base (CCCTB) faces an uncertain future following rejection of the proposals by nine member states.
The UK, Netherlands, Poland, Slovenia, Romania, Bulgaria, Ireland, Malta and Sweden all rejected the proposals principally on the grounds of subsidiarity, although member states also acknowledged loss of sovereignty and complexity of implementing a new tax regime as additional concerns.
In a survey earlier this year of Taxand's clients across the world, around 70% of multinational companies within Europe were in favour of the idea of harmonisation. However, they are also concerned about the rising cost of compliance.
Member states who agree with the implementation of the CCCTB have the opportunity to introduce the rules on the basis of 'enhanced cooperation', although this will be viewed as a last resort.
Over the coming months, the current draft directive proposed by the Commission is more likely to serve as a starting point for negotiations amongst member states. However, unless the parameters of the negotiations are tightly controlled, the CCCTB risks being subsumed into a much wider discussion about European tax coordination and cooperation.
The present situation leaves an air of uncertainty for multinational companies. It's imperative that the EC spends the next few months working towards more clarity on the proposals and its next route of action.
Whilst the current CCCTB proposals appear to have died a quick death, it's likely they'll resurrect in an alternate form in the near future."
Frederic Donnedieu de Vabres, Chairman of Taxand, the world's largest independent global organisation of specialist tax advisors to multinational businesses.
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