Abstract
The European Commission proposes a common consolidated corporate tax base (CCCTB)1. The first step to a CCCTB is a harmonised tax base which replaces the different tax accounting rules of 27 member states. Given the harmonised tax base, the CCCTB is designed to replace separate entity accounting and the arm’s length standard with consolidation and formula apportionment of a European group’s profit. The Commission does not propose to harmonise the corporate income tax rate. The member states are still free to choose the corporate income tax rate. Thus, the Commission’s proposal rests on the source principle.
See Commission of the European Communities, Communication from the Commission to the Council, the European Parliament and the European Economic and Social Committee, Towards an Internal Market without tax obstacles, Brussels, COM (2001) 582 final; European Commission, Common Consolidated Corporate Tax Base Working Group (CCCTB WG), Progress to date and future plans for the CCCTB, CCCTB\WP\046\doc\en, Brussels, 20 November 2006.
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References
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European Court of Justice (12 September 2006), Case C-196/04 (Cadbury Schweppes), OJ C 281, 5. Great Britain has focused CFC rules on controlled companies that do not carry on a genuine economic activity in terms of both business establishment and individuals working for the CFC.
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Schreiber, U. (2008). Evaluating the Common Consolidated Corporate Tax Base. In: Schön, W., Schreiber, U., Spengel, C. (eds) A Common Consolidated Corporate Tax Base for Europe — Eine einheitliche Körperschaftsteuerbemessungsgrundlage für Europa. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-79484-4_6
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