WIREDGOV

PwC comments on the launch of the European Commission's Common Consolidated Corporate Tax Base.

Commissioner Semeta, the European Commissioner responsible for taxation in the EU, has today launched the Commission's proposed Common Consolidated Corporate Tax Base (CCCTB).

Peter Cussons, head of PwC UK's EU Direct Tax Group, said:
"This is a major step forward for the Commission in getting the CCCTB proposal to this stage. All multinationals and SMEs operating in the EU cross-border need to follow these proposals closely, and to evaluate their potential effect on their EU corporation tax profiles and their European tax compliance functions.

The implementation of a CCCTB or CCTB including the optionality will depend on discussions in Council. However, if some Member States were to ultimately decide they did not wish to participate, the proposals may well go forward in the other Member States under the enhanced co-operation procedure, which has recently been successfully invoked as regards the European patent, valid in 25 out of the 27 Member States.

Implementation would be perhaps by 2013 or more likely by 2014."

Notes to Editors:

Background Notes
The CCCTB, which would be implemented via a Directive, would introduce an optional common corporate tax base in EU Member States.

Groups operating in the EU could opt in on an all-in basis - all eligible EU companies/private enterprises owned as to more than 50% of votes and more than 75% as to share capital or right to profits would then calculate their profits/losses on the new common basis.

This would then be aggregated and any resulting group net profit reallocated to the relevant Member State companies/PEs according to an apportionment formula based on employee payroll (1/6), headcount (1/6), tangible property (1/3) and sales by destination (1/3).

Groups would file their tax return with a single tax authority in the Member State of the principal EU company of the group. The concept of a common corporate tax base (CCTB) was acknowledged as a revenue neutral way forward to ensure consistency among national tax systems whilst respecting national tax strategies in the 11 March 2011 Conclusions of the 17 Heads of State or Government of the Euro area as part of the Pact for the Euro.

The next stage is the presentation of the Pact to the European Council 24/25 March 2011, with a view to the 10 non-euro area Member States indicating whether they intend to participate in the Pact.

For more information contact: