On Wednesday 20 September, the European Economic and Social Committee was officially the first European body to adopt its position on the proposals to create a common consolidated corporate tax base (CCCTB) in the EU.
The report, which was headed up by Michael McLoughlin of Ireland, argues that the member states should reflect on “whether to exclude intellectual property on the formulary apportionment” of the CCCTB's tax on profits. Under the Commission's proposal, member states could apportion the tax on profits of the company using a formula that gives equal weight to sales, assets and personnel. The "sales" factor, based on destination, also needs changes, the EESC states. It has concerns that smaller exporting member states could lose substantial amounts of taxable income to the larger consuming member states. More generally, it also expresses concern at the fact that “there has been no attempt to explain or define in a meaningful way how the general formula (...) is an appropriate representation of the economic reality” of a company for apportioning taxable profits between the member states. Like the European Parliament rapporteurs, the EESC also considers that consolidation is a fundamental element of the CCCTB and calls for a swift introduction of this concept as soon as there is agreement on the common base. (Original version in French by Élodie Lamer)