CCCTB a targeted reform for EU says Commissioner-designate
High ranking eu Parliament officials are targeting tax harmonisation as a reform to come out of the financial crisis, as the new European Commissioner for Taxation-designate, Lithuania’s Algirdas Semeta has announced his support for a Common Consolidated Corporate Tax Base (CCCTB) in hearings.

A report to the President of the European Parliament Klaus Welle entitled EU Policy Challenges 2009-2019, outlines these beliefs. It is written by the heads of the five different policy departments within the Directorate General for Internal Policies and one department head from within the Directorate General for External Policies and covers a wide range of topics. But in the area of economic policy, the report shows the political will that remains in Brussels to introduce tax harmonisation.

The report devises a set of possible scenarios one of which is where tax policies and tax legislation/practices in Member States are further harmonised, especially in direct taxation. It is this scenario that the report’s authors describe as most ‘desirable’ and something they say has ‘not been realistic until now.’

Just as the ‘financial crisis’ has been used to justify changes in regulations in many areas, the Parliament report cites it as an opportunity for introducing CCCTB. ‘It remains to be seen whether the crisis presents a lasting opportunity for more harmonization in direct taxation legislation, such as the Common Consolidated Corporate Tax Base (CCCTB), which the European Parliament has been actively calling for,’ it says.

This sentiment emerges also in the responses of Commissioner-designate Semeta on 12th January when facing questioning from MEPs on the Economic and Monetary Affairs committee. At the questioning, he announced his support for a CCCTB, promising to focus on proposals for a common consolidated corporate tax base, a simplification of the tax system, and harmonization of tax calculation rules. He said he would aim for a CCCTB as soon as possible. He said, ‘We could proceed with such a possibility, which is in the Lisbon Treaty.’ While the introduction of a common tax base would require unanimous approval by member states, including Ireland, under Article 20 of the treaty (on enhanced cooperation), a minimum of 9 member states can adopt a decision that is binding only on them.

This could involve, for example, the introduction of CCCTB in a subset of EU states, akin to the eurozone.
This article appeared in the January 2010 edition.