Common Corporate Tax Base (CC(C)TB) and Determination of Taxable Income
The study conducted by the Centre of European Economic Research (ZEW), the University of Mannheim and Ernst & Young contributes to the ongoing evaluation of the proposal for a Draft Council Directive on a Common Consolidated Corporate Tax Base (CC(C)T
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Christoph Spengel • York Zöllkau Editors
Common Corporate Tax Base (CC(C)TB) and Determination of Taxable Income An International Comparison
Editors Professor Dr. Christoph Spengel University of Mannheim and Centre for European Economic Research (ZEW) Mannheim Germany
York Zöllkau Ernst & Young GmbH Wirtschaftsprüfungsgesellschaft Cologne Germany
e-ISBN 978-3-642-28433-5 ISBN 978-3-642-28432-8 DOI 10.1007/978-3-642-28433-5 Springer Heidelberg Dordrecht London New York Library of Congress Control Number: 2012934150 © Springer-Verlag Berlin Heidelberg 2012 This work is subject to copyright. All rights are reserved, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilm or in any other way, and storage in data banks. Duplication of this publication or parts thereof is permitted only under the provisions of the German Copyright Law of September 9, 1965, in its current version, and permission for use must always be obtained from Springer. Violations are liable to prosecution under the German Copyright Law. The use of general descriptive names, registered names, trademarks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Printed on acid-free paper Springer is part of Springer Science+Business Media (www.springer.com)
Preface
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Preface
After intensive and extensive preparation, the European Commission released the awaited proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB) on March 16, 2011. The CCCTB is a proposal to provide companies with the opportunity to determine taxable income following a three-step approach: (1) Determination of individual income based on a harmonised set of tax accounting regulations, (2) consolidation of individual incomes and (3) allocation of the consolidated tax base by formula apportionment. Yet, as the second and third step of a CCCTB, i.e. the consolidation and the sharing mechanism, still suffer from considerable shortcomings, we recommend introducing the CCCTB in two steps. The first step merely concerns the replacement of the national tax accounting regulations across Member States by a single set of harmonised tax rules. Such a Common Corporate Tax Base (CCTB) only affects the calculation of the corporate tax base; the consolidation and allocation of the common tax base would be omitted for the present and considered at a later stage of tax harmonisation in Europe. Our study contributes to the ongoing evaluation of the proposed Council Directive. For the first time, details on the determination of taxable income under the proposed Council Directive are being compared and contrasted to prevailing corporate tax accounting regulations as of January 1, 2011 in all 27 Member States, Switzerland and the US. In doing so, we present evidence on the extent of differences and simi
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