Media reports in January have it that the Czech Presidency of the EU have at least postponed plans to progress the Common Consolidated Corporate Tax Base during its presidency. It's also been suggested that this may be because of Ireland's sensitivities to tax issues in the run up to a further referendum on Lisbon. But the real reasons are probably more pragmatic than this.

According to its statement, the Czech Presidency, in the field of taxation, will:

• Fight against tax evasion and tax avoidance as its key priority in the tax field.
• Focus on improving tax administration and administrative cooperation among the Member States.
• Try to reach agreement on reduced VAT rates.
• Endeavour to finalise negotiations on the amendment to the tobacco taxation directives.
• Put great effort into reaching progress in the discussion about the review of the Savings Directive and the modernisation of rules for applying VAT to financial and insurance services.

The specific items mentioned – VAT rates, the review of the Savings Directive, and VAT on financial and insurance services – have been bubbling along for several years. As has CCCTB, but no mention of that in the context of “improving tax administration”.

There are many inherent risks associated with CCCTB, and this Institute has lobbied hard over the last two years in particular to point these out. They include increased administration and a potentially unfair distribution of tax revenues raised among EU Member States. Ireland could have been particularly prejudiced as the proposed criteria for distribution of profits included market size and levels of capital investment.

The risk that may be focussing minds most now is that CCCTB could result in an overall reduction in the EU Corporate Tax take. Remember that the CCCTB mechanism for calculating taxable profits was to be optional. Maybe the coin has dropped that corporate groups would be far more likely to adopt CCCTB if it resulted in tax savings in the higher corporation tax rate jurisdictions such as Germany?

In these difficult times, no sovereign State would wish to countenance a reduction in tax revenues, even if these were only to arise from timing differences. Of all its proclaimed advantages, there was never a suggestion that it would result in earlier tax receipts. More recent suggestions that CCCTB could be fast-tracked under the process of Enhanced Cooperation, where a subgroup of EU Member States could operate it by mutual agreement, are equally off the mark. If CCCTB were to work at all, all Member States would have to join the party. How can you have an EU “Common” tax base if not all the EU Member States subscribe to it?

Though CCCTB featured in the Irish debate on the Lisbon Treaty, it was a red herring as the acceptance or otherwise of Lisbon would not have altered Ireland's capacity to reject CCCTB if it were not in our national interest. Ireland could end up in the invidious position of being scapegoated for the EU's abandonment of CCCTB due to our rejection of Lisbon I. This would ignore the real reason, which is simply that it would cost too much in lost tax.