Sunday

18th Nov 2018

Brussels pushes common EU tax base

The European Commission on Wednesday (16 March) proposed a system where companies will be able to file just one tax return for the whole of the EU, a move that Brussels stresses would not infringe on states' ability to set their own corporate tax rates.

The move is being sold as a winner for business, but Ireland believes it is one step down the road to removing its low corporate tax rate. A number of other member states also oppose the move and so it is far from certain that the proposal will fly.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

  • The CCCTB would save businesses billions a year, says the commission (Photo: Flickr)

The proposal would see the development of a common system for calculating the tax base for firms operating across the EU, offering them a ‘one-stop shop' for filing returns and simplifying what counts as profits and losses rather than having to deal with up to 27 different tax regimes.

The system, termed a common consolidated corporate tax base, or CCCTB, would save companies €700 million a year in reducing the costs of complying with tax regimes and as much as €1.3 billion by being able to consolidate profits and losses.

Small and medium-sized businesses looking to expand across borders meanwhile, the commission estimates, would win an extra €1 billion in savings.

Firms "are faced with an extremely complex system for determining how intra-group transactions should be taxed (transfer pricing), and cannot offset their losses in one member state against profits in another," the commission said in a statement.

"The result is that larger businesses are faced with huge costs and complexities, while smaller businesses are often completely deterred from expanding within the EU."

Under the CCCTB, companies would file a single, consolidated tax return with one administration for their entire activity within the EU. On the basis of this, the operation's tax base would then be shared out amongst the member states in which it is active, based on a specific formula.

Taxation commissioner Algirdas Semeta said it will "make it easier, cheaper and more convenient to do business in the EU ... Today's proposal is good for business and good for the EU's global competitiveness."

However, Dublin remains steadfastly opposed to the plan, with new premier Enda Kenny last week describing the move as "tax harmonisation through the back door."

But Ireland is not alone in its stance. The Czechs, Slovaks and British also do not a agree with the move.

In February, an Ernst & Young study, commissioned by the Irish government, found that as there are costs involved in any shift to a new tax regime, before any savings could be realised, there would be high initial compliance costs in changing company models.

EU considering mandatory corporate tax base

The European Commission has said it will reintroduce a previously shelved plan for a common corporate tax system in a bid to clamp down on tax avoidance by multinationals

Italy defiant on budget on eve of EU deadline

Italy would be committing economic "suicide" if it fell in line with EU rules, its deputy leader has said, in a sign that Rome has little intention of bowing to pressure ahead of Tuesday's budget deadline.

Greek austerity violated right to health, says watchdog

Cuts in the Greek health care system, following the austerity cuts demanded in return for international bailouts, have violated the European Social Charter on the right to health, says Council of Europe's human rights commissioner, Dunja Mijatovic.

Analysis

Salvini is gambling with core voters' future in budget battle

Businesses in northern Italy are anxiously watching the standoff between the European Commission and the Italian government. They used to be the 'Northern League's' most important electorate - but the party's profile and priorities have changed.

EU commission eyes majority tax rules

The commission plans to address tax avoidance schemes in some EU states by shifting tax decisions away from unanimity to a majority system in what amounts to a long shot.

News in Brief

  1. US warns EU banks and firms against trading with Iran
  2. Merkel urged Romania not to move embassy to Jerusalem
  3. Protesters call for Czech leader to step down
  4. Former German chancellor labelled 'enemy' of Ukraine
  5. French lead opposition to Brexit deal on fisheries
  6. Private accounts of Danske Bank employees investigated
  7. UK's May defends Brexit deal to MPs, after ministers resign
  8. Brexit MP calls for 'no confidence' vote on May

Stakeholder

An open China brings opportunities to Europe

Some 60 years ago, the first major World Fair after World War II was held in Brussels. Sixty years on, China International Import Expo (CIIE), the first world expo dedicated to expanding imports, will open in Shanghai, China.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSTheresa May: “We will not be turning our backs on the Nordic region”
  2. International Partnership for Human RightsOpen letter to Emmanuel Macron ahead of Uzbek president's visit
  3. International Partnership for Human RightsRaising key human rights concerns during visit of Turkmenistan's foreign minister
  4. NORDIC COUNCIL OF MINISTERSState of the Nordic Region presented in Brussels
  5. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  6. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  7. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  8. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  9. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  10. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  11. International Partnership for Human RightsCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  12. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs

Latest News

  1. Brexit dominates EU affairs This WEEK
  2. How the EU commission got tunnel vision on self-driving cars
  3. No-confidence calls against May put Brexit deal in doubt
  4. Key points of the Brexit deal (if it ever comes into effect)
  5. Romania heaps scorn on 'revolting' EU criticism
  6. US steps in to clean up Cyprus
  7. 'Decisive progress' on Brexit as British cabinet backs deal
  8. Asylum for Macedonia's ex-PM puts Orban on spot

Join EUobserver

Support quality EU news

Join us