corporate tax base
Tax professionals in Europe have thrown their support behind a
harmonised, pan-European Union corporate tax system for
Research from KPMG International has found 78 percent of finance
directors, tax directors and tax managers from more than 400
companies, including some of the largest companies from all 27 EU
countries and Switzerland, are in favour of a single EU-wide
solution. The EC recently unveiled plans for a common consolidated
corporate tax base (CCCTB), which would calculate the profits of
businesses operating in more than one EU member state according to
a single 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
The KPMG study found tax professionals in the Czech Republic,
Denmark and Spain were 100 percent in favour; in Italy the figure
was 96 percent; 90 percent in Greece, Luxembourg, Poland, Romania,
Slovenia and Sweden; 84 percent in Germany; and 80 percent in
Austria, Finland, Hungary and Portugal.
Among the large economies, UK professionals were most sceptical:
62 percent in favour and 32 percent against. Only Ireland and
Slovakia registered majorities against the proposal, with just over
50 percent opposed in each country.
Sue Bonney, head of tax for KPMG in EMEA, said business is
sending a message to policymakers that they are prepared to trade
choice for certainty: “We were surprised by the strength of opinion
in favour of the CCCTB proposals. Even though the scheme has not
yet been made public, 34 percent of respondents said their
companies would definitely choose to use it, with 48 percent
reserving judgement until they see the detail.”
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Although the EC has stressed it is not proposing a single
European corporate tax rate, 69 percent of respondents said that in
addition to the common corporate tax base, they would like to see a
single rate for the whole of Europe. However, a majority of
respondents from the UK, Cyprus, Ireland, Poland and Switzerland
were against a single rate. Denmark respondents were evenly split
for and against, but in all other countries there was strong
support for the idea.
The study found that businesses were attracted by the prospect
of more straightforward tax compliance and better business
planning. Although 22 percent thought the new system could increase
the amount of tax their business pays, this was balanced by 21
percent who thought their tax bills would fall, and 42 percent who
thought it would make little difference.
Bonney said the survey shows European corporate tax rates are
among the lowest in the world. She added: “The message from
business seems to be that if EU member states are able to
consolidate their low rates and simplify the compliance system,
they have an opportunity to win a potentially lasting global
competitive advantage for European companies.”