Tax professionals in Europe’s biggest businesses are in favor of European Commission proposals for a harmonized, pan European corporate tax system, a new study has found.
Finance directors, tax directors and tax managers from over 400 companies, including some of the largest companies from all 27 EU countries and Switzerland, were asked their view of European Commission plans for a Common Consolidated Corporate Tax Base (CCCTB).
The plans propose that the profits of businesses operating in more than one EU member state should be calculated according to a single EU-wide formula, rather than the 27 different formulae used today. Profits would then be reallocated to the countries in which the businesses are active, to be taxed at those countries’ tax rates. The idea was supported by 78 percent of respondents across Europe.
Although the study focuses on the European dimension of the CCCTB, the answers of the Belgian respondents are also very interesting. First the Belgian respondents largely support the idea of harmonization of the corporate tax base on a consolidated basis. The lack of a consolidated corporate tax base in Belgium, as opposed to our neighbouring countries and most EU member states, surely influenced the answers on questions such as criteria of profit allocation and on the support for the Commissions initiative as a whole.
Finally 90 percent of the Belgian respondents said that in addition to the common corporate tax base, they would like to see a single corporate tax rate for the whole of Europe in the future.
The Commission proposals are due to be made public in 2008, and the Commission hopes that they will be in place by 2010. Many respondents thought that this timetable was optimistic, but 66 percent expected the system to be in place by 2015 and 85 percent by 2020. Only 15 percent said that it would never happen…
The complete study referred to can be downloaded free of charge by double-clicking here.