A significant EU project, the Common Consolidated Corporate Tax Base (CCCTB) has the potential to have a dramatic and negative impact on companies doing business in Europe, but there is limited awareness of the project, a poll by PwC has found.
The CCCTB project purports to re-write the rules for calculating and allocating taxable profits in the EU. This has the potential to have a serious and damaging impact on the tax position of many businesses, yet only 8% of respondents profess to have any working knowledge of the proposed rules, and only 1% of those polled by PwC are satisfied that they understand the potential impact on their businesses.
Colm Kelly, Senior Tax Partner at PwC, commented "The proposals represent a very serious threat to European business - they have the potential to increase the tax burden on business in the EU, and contrary to the stated objectives of the project, will also add significantly to the complexity of the European tax system. The CCCTB is bad for business, bad for Ireland, and bad for the EU. It is essential that companies assess the potential impact on their business, and communicate concerns both directly and through representative bodies".
Interestingly, while 91% of respondents believe there is not a sufficient awareness among stakeholders about the extent of the tax contribution made by business, only 37% of respondents know themselves what the Total Tax Contribution is of their own business actually is.
Kelly comments "Business tax is complex - there are over 20 different kinds of tax potentially levied on business, yet few businesses fully appreciate just how much they are contributing, and even fewer communicate this to stakeholders. This is also an essential component in any debate about CCCTB, to ensure the debate is an informed one. Most companies will of course welcome any initiative to reduce compliance and administration costs, and this is how the CCCTB is being presented. Unfortunately the currently proposals will very likely result in greater complexity and greater cost, and I would suggest that business should be careful to respond accordingly".
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