The Common Consolidated Corporate Tax Base (CCCTB) and Third Countries
Edited by Michael Lang, Pasquale Pistone, Josef Schuch, Claus Staringer and Alfred Storck
Chapter 2: Taxation of EU-non-resident companiesunder the CCCTB system: Analysis and suggestions for improvement
Ever since its establishment the European Union has sought to create a level playing field for companies operating in Europe, so that European multinationals can compete successfully with their foreign counterparts. However, it is common knowledge that the existence of 2 different company taxation regimes within the Union distorts intra-Union trade and investment. It is true that the Court of Justice of the European Union (CJ) has already removed a large number of company tax distortions by interpreting the Treaty freedoms in a rather extensive fashion. The CJ, however, has its limits and cannot abolish all the existing distortions resulting from 2 different company taxation regimes existing side by side. The removal of tax obstacles, such as double taxation resulting from transfer pricing mismatches or the lack of cross-border loss relief, ultimately requires action by the Union legislator. However, up until now, only a modest degree of harmonization in the area of company taxation within the Union has been established. Since Member States have been reluctant to give up much sovereignty in taxation matters, company tax systems of the 27 Member States nowadays still show substantial differences as a result of which patterns of investments between the Member States may still easily be distorted. In 2004, however, the European Commission launched an ambitious project which seeks to introduce within the Union a Common Consolidated Corporate Tax Base and on 16 March 2011, the Commission has published its proposal for a Common Consolidated Corporate Tax Base (CCCTB).
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