On 4 April, the Commission is scheduled to unveil a new proposal on the introduction of a common consolidated corporate tax base (CCCTB) at the end of 2008. CCCTB is a Union-wide measure that would seek to offer to businesses operating across the Union's internal market uniform rules for calculating their aggregated EU-wide profits. This in turn would reduce the costs stemming from the co-existence of different national tax systems.
The Commission's upcoming proposal is based on detailed preparations conducted since the launch of a communication in October 2001 on new plans for company taxation.
While the EC Treaty does not specifically call for direct taxes (ie income and corporate taxes) to be harmonised, Article 94 of the Treaty does provide for the cross-border approximation of the relevant laws.
According to Taxation Commissioner Laszlo Kovacs, the ongoing work of the Commission relates to the tax base only, but not to the way tax rates are set. The latter "will continue to be the sole prerogative of the member states," he said, stressing that the CCCTB "is a question of transparency, clarity and simplification," which will therefore "bring a significant reduction in compliance costs."
Following the Commission's expected approval, the proposal may be presented to the EU's finance ministers in June. Currently, over a third of the member states are understood to support the proposal. However, seven countries (UK, Ireland, Slovakia, Malta, Lithuania, Latvia and Estonia) have already voiced their reservations.
The proposal will require unanimous support to pass.
