Commission receives 170 submissions on corporate tax

The European Commission has received more than 170 submissions on its proposal for a revised common consolidated corporate tax base (CCCTB) ahead of its re-launch later this year.

The closing date for the commission’s three-month public consultation process was last Friday, with a range of stakeholders making submissions.

Preliminary information shows that the Commission received 69 submissions from professional associations and law firms, 54 responses from businesses who pay corporate tax, and 16 from non-governmental organisations (NGOs) since the public consultation process opened on October 8th.

The submissions, which are currently being reviewed by the European Commission, will feed into the proposed re-launch of the proposal in the autumn. In a bid to allay member states’ concerns about the viability of the CCCTB, which failed to gain political support when it was launched in 2010, the commission has proposed a two-step approach to the scheme, proposing that the consolidation element , which deals with how profits and losses are calculated across countries, will be deferred.

The first phase of the CCCTB will involve the proposal of the so-called ‘anti-Beps’ directive , which will incorporate many of the base erosion and profit shifting (BEPS) initiatives agreed last year at OECD level.

Though euro zone and EU finance ministers gather in Brussels on Thursday and Friday for their first scheduled meeting of the New Year, discussion of the CCCTB is not on the agenda.

Tom Maguire, tax partner at Deloitte, said that Ireland's continued economic competitiveness could be greatly affected by the new CCCTB proposals.

"Countries have different tax rules for good reason. The EU's 28 economies are not the same – they have different funding needs, different demographics," he said, adding that the potential loss of annual corporation tax revenue for Ireland could be as high as € 650 million.

Later this month the European Commission is expected to launch a new anti-tax avoidance package, which will include legally-binding measures to implement certain OECD BEPs measures at an EU level, a sensitive issue given the resistance by some member states to any move by the EU to legislate on corporate tax matters.

Brian Keegan of Chartered Accountants Ireland, which made a submission to the European Commission during the public consultation period, said the institute is strongly against the current CCCTB proposal and stressed that any EU regulations or directives on BEPs should not go beyond measures already agreed at OECD level.

The plan to re-launch CCCTB this year is the latest move by the European Commission to tackle corporate tax avoidance at an EU level.

Addressing MEPs in the European Parliament in Brussels on Monday evening, EU economics commissioner Pierre Moscovici said that 2016 would be the year of "corporate tax reform and fiscal transparency."

“We have a serious problem with tax avoidance and lack of transparency. Too many people have looked the other way”, Mr Moscovici told members of the European Parliament’s economic and monetary affairs committee. However, the former French finance minister, who has pledged to prioritise the fight against aggressive tax planning during his tenure at the European Commission, warned MEPs that the EU may find it difficult to agree on ambitious measures to combat unfair tax practices due to resistance from some member states and the requirement for unanimity at EU level for decisions on taxation.