The use of a common consolidated corporate tax base (CCCTB) should be mandatory according to the European Parliament when outlining its position on legislation proposed by the Commission in a vote held on 19 April. The Commission had proposed a voluntary scheme.

In the Parliament's amendment to the Commission's proposal, it was stated that as the internal market encompasses all Member States, the CCCTB should be introduced in all Member States after a transition period of operating in Member States who support the measure.

While the show of support for CCCTB in the European Parliament is strong, any measure introducing a direct taxation measure such as the common consolidated tax base must be passed by a unanimous vote at Council. As Council includes the Heads of State of a number of countries against CCCTB, including Ireland, proposals from the Commission and Parliament are not likely to progress very far.

The prospect of a unanimous vote is all the more unlikely considering the number of governments who made submissions to the European Parliament asserting that the draft legislation put forward by the Commission does not comply with the principle of subsidiarity.

Such submissions were made by the Bulgarian, Irish, Maltese, Dutch, Polish, Romanian, Slovak, Swedish and UK governments.

In a statement from the MEP leading the endorsement of CCCTB, Marianne Thyssen, CCCTB is said to:

• make it easier for companies to have and keep branches in different Member States
• reduce red tape and
• ensure that economic and social aspects are more important than fiscal reasons for companies in deciding where to locate

Chartered Accountants Ireland has concerns on whether the CCCTB can achieve any of these objectives and believes that CCCTB will create additional problems particularly for companies operating both inside and outside of Europe. For previous commentary on CCCTB see http://www.charteredaccountants.ie/General/News-and-Events/News1/2011/March/European-Commission-Launch-Latest-Proposal-for-Common-Consolidated-Corporate-Tax-Base-CCCTB/

For details of the European Parliaments amendment to the Commission's draft directive, see http://www.europarl.europa.eu/news/en/pressroom/content/20120418IPR43390/html/Corporate-taxation-Parliament-pushes-for-a-compulsory-common-base