A helpful and short guide to the CMU plan’s taxation measures, with a focus on the Common Consolidated Corporate Tax Base (CCCTB).
The CMU Action Plan recognises the intrinsic link between corporate taxation and capital markets. It therefore includes proposals for a common consolidated corporate tax base (CCCTB) under the umbrella of new CMU proposals. Here the Commission proposes to examine the divergent treatment in various Member States of different financial instruments, as well as any preferential tax treatment of debt funding (resulting from the deductibility of interest rate payments), which often operates to the exclusion of equity investment.
According to the new Commission Work Programme for 2016, the Commission will withdraw its original CCCTB proposal and introduce proposals for a staged approach towards the CCCTB. The primary objective will be to gradually establish a mandatory CCCTB in order to help prevent profit shifting, on the basis that an optional system is unlikely to be adopted by companies that avoid taxes through aggressive tax planning. The stages will most likely consist of first implementing the OECD anti-BEPs at the Union level, then setting up the CCCTB, without consolidation but possibly with some loss offset mechanisms, and finally moving Member States towards consolidation. The Commission has opened a consultation, the focus of which should accordingly be on the intermediary stages of moves towards the CCCTB in order to ascertain whether the Commission can achieve at least some of its more ambitious aims on the CCCTB programme.
Through the public consultation, which closes on 8 January 2016, the Commission aims to analyse evidence and gather information on possible policy directions which the project might take.