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Legal Update

European Commission Proposes Common System for Corporate Income Tax Base Calculation

16 March 2011
Mayer Brown Legal Update

The European Commission has presented a formal proposal for a common system for calculating the tax base (CCCTB) of businesses operating in the European Union. This is a significant development for a project started 10 years ago.

The aim of this proposal is to significantly reduce the administrative burden, compliance costs and legal uncertainties that businesses face in having to comply with up to 27 different national systems for determining their taxable profits. The proposal offers companies one set of corporate tax-base rules to follow and the possibility of filing a single, consolidated tax return with one administration for their entire activity within the European Union.

Using this single tax return, the company's tax base would then be shared out among the Member States in which it is active, according to a specific formula. The optional character of the system, an element praised by many companies, is endorsed in the Commission’s proposal. This proposal does not aim to tackle corporate income tax rates, which Member States will continue to set as they see fit.

The CCCTB has been identified as an important initiative of the Barroso II Commission in the context of the Europe 2020 Strategy. It has also been mentioned in a series of major policy documents that aim to remove obstacles to the Single Market and stimulate growth and job creation within the European Union (Single Market Act, Annual Growth Survey and the Pact for the Euro). The proposal will now move to the European Parliament and Council where there are, not surprisingly, more differences of opinion on the matter than agreement.

Get the full text of the new proposal.

For more information, please contact:

Astrid Pieron
Tel: +32 2 551 5968

Charles-Albert Helleputte
Tel: +32 2 551 5982


  • Charles-Albert Helleputte
    T +32 2 551 5982
  • Astrid Pieron
    T +32 2 551 5968

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