At an EU conference on company taxation on 29-30 April, EU Actors gave considerable support to the Commission’s proposal that companies should ultimately be allowed to use a single consolidated tax base for their EU-wide business activities.
The main issues discussed or concluded at the conference were:
- targeted legislative measures should be agreed at EU level to resolve individual tax obstacles;
- in the long term only a common EU tax base would provide “greater efficiency, simplicity and transparency” in company tax systems;
- preference was shown for the approach of a ‘common consolidated tax base’ (where a multinational group could calculate its tax dues for all its EU operations according to a new common set of EU tax rules);
- the ‘home state taxation’ approach (where a multinational group could calculate its tax dues for all its EU operations according to the tax rules of the Member State where its headquarters are based) was not generally favoured, except perhaps for SMEs;
- many participants judged a ‘European corporate income tax’ and ‘compulsory harmonisation of existing tax bases’ as unfeasible for the moment;
- further research would be necessary:
- in the potential for using the International Accounting Standards (IAS);
- the possible competition and discrimination problems that could arise from having an optional common tax base running alongside traditional national tax bases
- development of an appropriate mechanism to apportion a common EU tax base between Member States.