Corporate Income Taxation in Europe The Common Consolidated Corporate Tax Base (CCCTB) and Third Countries
The Common Consolidated Corporate Tax Base (CCCTB) and Third Countries
Edited by Michael Lang, Pasquale Pistone, Josef Schuch, Claus Staringer and Alfred Storck
The CCCTB is no doubt one of the most challenging and contentious directives that the EU Commission has ever launched in the field of direct taxation. Its rules provide for a considerable reduction of tax barriers such as transfer pricing compliance obligations and denials of group loss compensation in the internal market. This reduction would, in line with the Lisbon goals, encourage investment and innovation, competitiveness and growth. On the other hand, the implemented CCCTB would deprive the EU Member States of control over fiscal policy in relation to corporate tax, with the effect that EU Member States would lose tax sovereignty. The very controversial discussions taking place in the Council working group on the CCCTB are thus of no surprise. One of the main benefits often linked with the CCCTB is consolidation, which implies that EU companies will also be freed from compliance with intra-group transfer pricing rules. Since MNEs and tax administrations have been subject to increasing compliance and verification work with respect to transfer policy documentation, country differences and multi-country filings, the EU Commission believes that the introduction of the CCCTB will be a major step to reducing compliance costs. Traversa and Helleputte, however, pose very important and challenging questions on transfer pricing and the CCCTB: how transfer pricing disputes have to be dealt with under the directive and how cases have to be handled, where, under a DTC, the arm’s length rule will override the apportionment of revenue by the formula.
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