European Parliament pushes for a compulsory common corporate taxation base

The use of a common consolidated corporate tax base should be made compulsory, said Parliament in a vote on Thursday outlining its position on legislation proposed by the Commission

The common consolidated corporate tax base (CCCTB) should become mandatory after a transition period, says the resolution, which was approved with 452 votes in favour, 172 against and 36 abstentions.

Initially, the CCCTB would only apply to European cooperative societies, which are by nature cross-border. After five years, it would apply to all companies except small and medium-sized enterprises (SMEs) which could opt in if they so wish. For SMEs, the Commission should work to reduce administrative burdens so as to enable those with cross-border activities to benefit from adhering to the CCCTB system.

Parliament’s position also proposes that if not all Member States wish to take part in the scheme, then those that do could introduce it via the EU’s enhanced cooperation procedure.

The CCCTB system would give companies a single set of rules for calculating their taxable profits, rather than having to comply with differing accounting rules in each Member State in which they work. As a set of rules for computing taxable income, CCCTB does not impose any common tax rates.