The 25 September paper admits that the plan to harmonise the corporate income tax base, due to be unveiled before the end of the year, could potentially help companies cut their tax compliance costs.
However, he fears that the CCCTB will cause higher administrative costs for public sector authorities in the participating countries.
Moreover, he warns that a CCCTB involves "considerable curtailment of the member states' tax autonomy", and as decisions relating to taxes require unanimity, he believes that "the chances of a CCCTB being realised for the EU-27 are rather small".
Zipfel describes the CCCTB concept as an approach which, rather than being self-contained, allows various methodological designs that are not only technically extremely sophisticated, but can also "seriously distort investment decisions".
The paper points out that there is "potential for considerable conflict" over the CCCTB’s requirement of an allocation mechanism to distribute a company's consolidated tax base among the member states, and claims that as member states can still set their own national tax rates, "truly neutral taxation is unlikely".
Zipfel concludes that a CCCTB is a good idea in principle, cutting costs for companies but struggling to attain its objectives of tax neutrality and appropriate distribution of the tax take.
He predicts that ensuring an equitable sharing of tax revenues among member states may prove an "insurmountable obstacle", and warns that changes in decision-making will be necessary to allow the CCCTB to be continually altered to suit changing circumstances.
Finally, he states that if the implementation of a CCCTB is successful, then it might become a new standard beyond EU borders.
