The European Parliament has published a report on the impact of ECJ decisions in the area of Direct Taxation.

Unsurprisingly the report looks at the CCCTB as a solution to the case-law method, because the case-law method is seen to have various limitations, among which it is described as “slow, expensive, often influenced by individual situations and thus not always predictable”. In addition, it is described as inadequate to remove situations of double taxation, where no issue of discrimination is at stake.

In the area of CCCTB, the report concludes that “Considering the financial consequences which breaches of EC law can entail for the Member States, including the reimbursement of undue taxes, harmonization may be preferred even for myopic reasons, even though the superior reasons remain that in the Internal market it is both unjust and inefficient to overtax cross-border situations.”

It is unclear how the CCCTB could overcome the limitations in the case-law method, as it was mentioned in the CCCTB Conference in Vienna in February that it is unlikely that sufficient detail will be given in a Directive so further ECJ decisions would be required to interpret any CCCTB.

“The Impact of the Rulings of the European Court of Justice in the Area of Direct Taxation” is available at http://www.europarl.europa.eu/activities/committees/studies/download.do?file=19994.