European Commission launches "Common Consolidated Corporate Tax Base

20th June, 2015 : On 17th June the European Commission launched the long spoken about "Common Consolidated Corporate Tax Base" (CCCTB) to induce tax reforms for calculating the tax base of businesses operating in the EU. This move is intended to plug the tax lacuna within the EU where multinational companies have used the low tax arrangements in some States to avoid taxes.

The Common Consolidated Corporate Tax Base (CCCTB) is a set of rules that will apply uniformly to all companies within the EU. These rules will be used to compute the taxable profits of the corporations. This means a tax paying company will need to comply with just one EU tax system and file just a single consolidated tax return for its income in the whole of the EU instead of following different rules and returns in each Member State.

In case of groups,  a single consolidated tax return can be file for the whole Group covering all their activities in the EU. The consolidated taxable profits of the group will be shared to the individual companies applying a simple formula. This will enable Member States to tax the profits of the companies in their state at their own national tax rate.