Chartered Accountants Ireland has been monitoring and making representations on the EU proposals for a Common Consolidated Corporate Tax Base (CCTB) for several years. Last month the Institute met with EU Tax Commissioner Mr Algirdas Šemeta in Brussels on the matter.

The Institute's position is that EU proposals for a harmonised approach to company taxation will be detrimental both to Irish and European business interests alike. The EU's proposals for a CCCTB were originally mooted in 2001. Upon his recent appointment the new Commissioner Mr Algirdas Šemeta outlined his full support for the introduction of CCCTB.

The meeting between Mr Šemeta and Chartered Accountants Ireland was brokered by Irish MEP Ms Marian Harkin and took place on 5 May at the European Parliament. The Institute was represented at the meeting by chairman of the Tax Committee Liam Lynch of KPMG, and the Institute's Director of Taxation Brian Keegan.

We explained to the Commissioner and his officials it is our view that the CCCTB will have a negative impact on Ireland's ability and the ability of other EU Member States alike to attract Foreign Direct investment. We stressed that the circumstances which prompted the CCCTB proposals in the first place have changed radically since 2001, and the initiative as then envisaged may no longer be necessary. The document forming the basis of our discussions is available here.

Commissioner Šemeta was very engaged on the issues surrounding CCCTB, and very open with regard to his views on the matter. The Commissioner is committed to this project, and he confirmed that it remains the official policy of the Commission. He believes that the introduction of a CCCTB would help the operation of the internal market, and therefore it is worth pursuing. He indicated that it is his intention to bring forward the formal Commission proposal on a CCCTB in the first quarter of 2011.

Commissioner Šemeta stressed very strongly his commitment to the principle of subsidiarity (the delegation of power to the lowest level appropriate), and was at pains to point out that neither he nor the Commission generally, have any ambition to harmonise tax rates and that this is essentially a simplification agenda.

We understand that the position has moved on from that outlined in existing EU published discussion documents, and that the final published proposals might well be quite different, perhaps with a particular focus on smaller companies and smaller groups of companies.

The Commissioner confirmed that he would incorporate the Chartered Accountants Ireland discussion document points in his CCCTB impact assessment (which forms part of the finalised proposals).