CCTB or CCCTB? – That is the Question.

The Common Consolidated Corporate Tax base (CCCTB) was proposed by the European Commission (EC) in 2011 as a single set of rules that cross-border companies could use to calculate their taxable profits in the EU, instead of needing to deal with different national systems. The EC suggested that this would reduce the administrative burden, compliance costs and legal uncertainties for cross-border companies and would significantly help to combat tax avoidance in the EU. Recognising that the original proposal was too ambitious to be adopted in a single step, the EC is now considering a phased approach.

There is perhaps as great a focus now on companies paying taxes in the countries where economic activity takes place and profits are generated as there was when the G20/OECD BEPS Project began. In its 28 January 2016 ‘chapeau’ or general overview Communication as part of its proposed Anti-Tax Avoidance Package, the EC reiterates that, for the EU ‘Single Market’, it is imperative that there is a “fair, efficient and growth-friendly corporate tax system” based on this principle. The EC previously said this in its June 2015 Action Plan for a Fair and Efficient Corporate Tax System in the EU. It points to the CCCTB as the ultimate goal in this regard, stating that it is on track to adopt new legislative proposals on the CCTB and CCCTB in Autumn 2016. Indeed, the CCCTB is likely to be a two-stage process. The first part would be a more immediate need and opportunity to address specific avoidance issues; the second would be the remainder of the CCCTB.

PwC’s CCCTB Working Group has been revamped to take a lead in considering the implications of CCTB/CCCTB for our clients and how we can assist them in responding to developments and opportunities in this area. Please contact its Chair Jonathan Hare for further information or opportunities.