The Common Consolidated Corporate Tax Base (CCCTB) is basically a proposal by the European Commission (EC), first issued on 16th March 2011, whereby all European Union (EU) Member states would give companies a single set of rules for calculating their taxable profits and the ultimate tax base. The CCCTB is seen as the first real attempt by the EC to provide some form of direct tax harmonsation within the EU.
Despite vehement opposition from certain member states, including countries such as Malta, Ireland and Cyprus, on April 19th the EP has voted in favour of a mandatory implementation of the CCCTB. It was agreed that the CCCTB would be introduced in a qualified and gradual manner as follows:
1.Iinitially only applicable to European cooperative societies.
2.After five years from its introduction, it would apply to all companies except small- and medium-sized enterprises. The latter are defined as those companies which;
a.employ less than 250 people and either ,
b.have a turnover of less than EUR50m or
c.A balance sheet of less than EUR43m.
The SME companies could always opt in the CCCTB should they wish to do so voluntarily.
Countries in favour of the CCCTB generally argue that such a harmoised system would make it easier for companies to have and keep branches in different member states and generally reduce administrative burdens. However, countries opposing the introduction of such a system oppose the concept's foundations since they argue that each EU Member should maintain its fiscal sovereignity and such a consolidated approach would render smaller EU states less competitve from a fiscal point of view when compared to the larger states.
The EC's proposal also currently differs from the EP's decision, since the former has advocated entities to join the CCCTB throughout the EU on a voluntary basis.