A study commissioned by the GUE/NGL, led by former MEP and now member of the Bundestag, Fabio De Masi, argues that the creation of the common corporate tax base would cause the profits of companies taxable in the EU to fall by 21% (or €200 billion), due to the consolidation of losses.
“The system of transfer pricing (...) does not work. Unitary taxation, which calculates profits on the EU level and apportions them to member states according to economic activity, would in theory be a good thing. The devil, however, is in the detail”, De Masi explains. MEP Martin Schirdewan lays out the concerns in detail.
Our study shows that allowing corporations to offset their losses across countries without at the same time demanding the apportionment of profits will lead to a massive reduction of the tax base. Furthermore, by limiting the scope of the directive to EU member states, the Commission incentivises profit shifting outside of the EU”, he explains. “If the CCCTB is to be successful, it has to take into account the global profits of multinationals and has to be combined with an effective minimum tax rate” of 25%, he adds.
For its part, the Commission has carried out its own impact assessment, which puts the loss of tax revenue at 0.8% of GDP, or €11 billion. (Original version in French by Élodie Lamer)