Common Corporate Tax Plan : The Common Consolidated Corporate Tax Base Plan initiative has been recently under review by the European Commission with the introduction of new proposals.In particular, in addition to the CCCTB relaunch proposal, additional reform measures have been published.The initial plan was rejected by member states back in 2011 when it was initially proposed but has recently been relaunched with the hope of been accepted this time.
Common Corporate Tax Plan : Two Step Process
The plan involves a process which is broken down to two steps: The first step involves the introduction of common rules regarding the calculation of a company’s tax base for all member states. Secondly, revenues on taxes would be allocated based on a number of common factors among member states such as sales, levels of employment and turnover.
What is the C.C.C.T.B. looking to achieve?
The primary goal of this plan is to make the cross border operation of companies in the European Union cheaper and easier in order to make the EU Single Market stronger.Furthermore, it has been argued that there would be the ability of filing a single tax return through a single tax authority for all Company activities in the EU. This would avoid the filing of tax returns in every country where such companies operate.In addition, Companies would be able to offset their losses in a member state by the profits in another member state.
It has also been mentioned that time would be spared regarding annual compliance activities significantly and also making it easier for setting up subsidiaries. Furthermore, the proposed plan would remove inconsistencies between various national systems and would be mandatory for certain multinational groups depending on their size which would be taxed in the place of generating profits. It has been expressed that simpler tax rules are in need to be introduced but at the same time to tackle tax avoidance.
Improved Dispute Resolution Systems and tackling mismatches
New proposals have been introduced for improving resolution methods from disputes arising from double taxation treaties as well as tackling mismatches with non-EU countries.
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