This is particularly important for small and start-up companies. The 2016 CCTB provides for the determination of a single set of rules for … The re-launched CCCTB will be implemented through a two-step process and will be mandatory for the largest groups in the EU. Support growth, jobs and investment in the EU. a common system for calculating the tax base of businesses operating in the EU: the Common Consolidated Corporate Tax Base (CCCTB). Other cookies are used to boost performance and guarantee security of the website. The re-launched CCCTB system will be mandatory for large groups, to cover those with the greatest capacity to tax plan. The CCCTB will give strong incentives to R&D. It will remove the current debt-bias in corporate taxation, by rewarding equity financing. Find out more about documents and publications. With the current international economic environment of increasingly globalised, mobile and digital business models and complex structures of multinational companies, it is becoming difficult for governments to ensure that business income is taxed in the countries in which the value is created. These rules aim to help small companies use capital markets and in general reduce the private sector's reliance on debt. The European Council is the EU institution that defines the general political direction and priorities of the European Union. In July 2013 EU ministers agreed that the establishment of the common corporate tax base should precede its consolidation. The aim is to promote innovation in the EU and help smaller companies develop. The proposal was therefore reworked by the European Commission and split into two directives: a directive establishing a common corporate tax base (CCTB), and a directive on a common consolidated corporate tax base (CCCTB). The CCCTB will fully recognise companies' cross-border activities in the Single Market. The Council adopted conclusions confirming the view that the work should first focus on the proposal to establish a common corporate tax base. The second stage seeks to bring about a fully consolidated corporate tax base, or CCCTB, across Member States. The directive contains a new tax allowance that aims to encourage companies to use equity rather than debt to finance their growth. It sequenced the work as follows: The Council's Working Party on Tax Questions started examining the proposals. The CCCTB will reduce red tape and cut compliance costs for companies in the Single Market. A special tax deduction would be available to companies that chose to increase their equity for financing their activities rather than taking on new debt. In addition, the draft rules propose that taxable revenues be reduced by business expenses and other items. It will incentivise R&D spending, which is crucial for growth, with a super-deduction. We´d love to know what you think about our website. Council debate on the proposal for a directive on a common corporate tax base, 23 May 2017. Follow the latest developments on policy-making and on legislation under negotiation. Each Member State will then tax its share of the profits at its own national tax rate. The CCCTB is in short the EU's attempt to completely harmonise corporation tax policy by the back door, creating a common system for taxing large companies across Europe. We will use this data to improve your experience on our website. The system will remain optional for those not captured by the mandatory scope. The new rules would also help member states fight against aggressive tax planning. It helps organise and ensure the coherence of the Council's work and the implementation of its 18-month programme. The European Commission has decided to re-launch the common consolidated corporate tax base (CCCTB) project in a two-step approach, with the publication on 25 October 2016 of two new interconnected proposals on a common corporate tax base (CCTB) and a common consolidated corporate tax base (CCCTB). This would be done using a specially designed apportionment formula. Differences in national corporate tax regimes across the EU create favourable conditions for transnational corporations to engage in tax planning schemes, which most commonly consist of shifting their profits to lower-tax jurisdictions (to the so-called 'preferential tax regimes'). Currently businesses in the EU need to comply with the requirements of different national corporate taxation systems, which can be a considerable administrative burden and an obstacle to cross-border investment in the EU. Factsheet2016 proposal on Common Tax Base - Annex2016 proposal on Consolidation - Annex. Both draft directives were published on 25 October 2016. To get more information about these cookies, how and why we use them and how you can change your settings, check our cookies policy page. The CCCTB can lift investment in the EU by 3.4% and growth by up to 1.2%. The CCTB is stage one of a two-stage approach towards an EU-wide corporate tax system and it lays down common corporate tax rules for computing the tax base of large companies and permanent establishments in the EU. Committees and working parties handle the preparatory work on files before they are discussed at Council meetings. With the CCCTB, cross-border companies will only have to comply with one, single EU system for computing their taxable income, rather than many different national rulebooks. The CCCTB will encourage stable financing. The consolidated taxable profits will be shared between the Member States in which the group is active, using an apportionment formula. The European Council brings together EU leaders at least four times a year. The proposal was therefore reworked by the European Commission and split into two directives: a directive establishing a common corporate tax base (CCTB), and a directive on a common consolidated corporate tax base (CCCTB). The CCCTB will provide companies with legal certainty and reduce tax obstacles, by providing a single, stable, transparent corporate tax system for the EU. Provisions against corporate tax avoidance (profit-shifting). However, the technical work on its anti-tax-avoidance aspects led to the adoption of the anti tax avoidance directive in 2016. The draft lists exempt revenues, which include profits from permanent establishments of a company in the state of that company's head office and income from dividends or sale of shares held in a company outside the group. This would reduce administrative costs and increase legal certainty for businesses by making the calculation of their taxable profits uniform in all EU countries. The Council of the EU and the European Council work on a wide range of issues affecting the interests of the EU and its citizens. In the first step, the common base should be implemented. The CCCTB will be implemented in two steps. Deciding corporate tax rates is a sovereign right of member states. Common Consolidated Corporate Tax Base (CCCTB), Synopsis of public consultation in 2015 on the re-launch of CCCTB. You can also take a look at Council publications, access the archives and search for legislation that the Council negotiates together with the European Parliament. This is a single set of rules which companies operating within the EU could opt to use to calculate their taxable proﬁ ts. Please take a few minutes to complete our short survey at the end of your visit. The draft CCTB directive contains an number of provisions against corporate tax avoidance, which include: These rules reflect the rules already agreed by the Council in the anti-tax-avoidance directive (ATAD). The press office holds press events, offers audiovisual coverage of major events and provides facilities for journalists. You can get in contact to arrange a visit, ask questions about the work of both institutions, and request a document, among other services. Read more about the role of the European Council, Proposal for a Council directive on a common corporate tax base, Proposal for a Council directive on a common consolidated corporate tax base, Presidency compromise proposal on 2011 proposal for a Council directive on common consolidated corporate tax base, November 2014, Anti tax avoidance package (background information), Common corporate tax base: Council policy debate, May 2017, Economic and Financial Affairs Council, 23/05/2017, Council conclusions on building a fair, competitive and stable corporate tax system for the EU, Economic and Financial Affairs Council, 6 December 2016, proposal for a directive establishing a common corporate tax base (CCTB), proposal for a directive establishing a common consolidated corporate tax base (CCCTB), The rules for calculating the tax base, especially the newly introduced elements (Chapters I to V), Remaining elements of the proposal on the common base (chapters VI-X), starting with those that had already been discussed in 2011, when the first proposal was analysed, and then moving on to the anti-tax-avoidance elements, which are also related to the recently adopted anti-tax-avoidance directive, Proposal on a common consolidated corporate tax base. 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