Corporate Income Taxation in Europe
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Corporate Income Taxation in Europe

The Common Consolidated Corporate Tax Base (CCCTB) and Third Countries

Edited by Michael Lang, Pasquale Pistone, Josef Schuch, Claus Staringer and Alfred Storck

This topical book is the first publication that focuses on the impact of the CCCTB project on relations between the European Union and third countries. Although the CCCTB system will only be applicable within the European Union, it will also have wide-ranging impacts for non-resident companies.
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Mitchell A. Kane


Professor Seer has provided in his chapter a thorough examination of the question of deductibility of gifts to charitable bodies in third countries under the proposed Council directive regarding a common consolidated corporate tax base. There are two features of the proposed directive’s treatment of this issue which are particularly worthy of note. First, donations to charitable bodies in third countries are deductible essentially on the same terms as donations to charitable bodies in Member States, at least where certain informational requirements are met. This commentary will refer to this feature as the “parity” provision. Second, donations to charitable bodies (in both Member States and third countries) are deductible only up to 0.5 per cent of revenues for a taxable year. This commentary will refer to this feature as the “cap” provision. Interestingly, this cap appears to be substantially lower than analogous caps under the national laws of various Member States. For example, some countries, such as the United Kingdom, apply no cap at all. German law likewise presents a notable contrast to the proposed directive. Specifically, Germany applies a cap under a sort of split-rule, according to which the cap on deductibility is set at the higher of 20 per cent of net income or 0.4 per cent of gross revenues plus payroll. Presumably the German reference to a gross base, in addition to a net base, is meant to allow space for deductibility of fixed contributions in years where a company has low net income, or even a loss.

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