IAFEI Quarterly - 33rd Issue

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international working Committees
On January 8, 2016, ANDAF (Italian CFO Association) sub-
mitted its position paper vis-à-vis the EU Public Consul-
tation on the Common Consolidated Corporate Tax Base
(CCCTB), launched on October 8, 2015. The main purpose
of this consultation was to gather the key elements that
should be included in the new CCCTB proposal, which is
expected to be released before Summer 2016.
The EU Public Consultation on the CCCTB was part of the
initiatives launched within the EU Commission Action Plan
for Fair and Efficient Corporate Taxation issued back in June
(COM(2015)302).1
This Action Plan sets forth five targeted areas to tackle tax
avoidance and evasion effectively, while ensuring sustai-
nable revenues to Member States and a level playing field
for European companies. Among the key areas acknow-
ledged by the Commission, the relaunching of the CCCTB
proposed by the Commission back in 2011 was identified
as an extremely effective tool for reaching the objectives
of fairer and more efficient taxation. The CCCTB was also
selected as an effective/valuable instrument to limit ag-
gressive tax planning opportunities.
Through this consultation, and due to the sensitivity of the
topic, which did not gather much consensus among Mem-
ber States over the past few years, the Commission was
willing to collect views of different stakeholders, in particu-
lar with regard to the following issues:
a) To what extent the CCCTB could function as an ef-
fective tool against aggressive tax planning, without com-
promising its initial objective of making the SingleMarket a
more business-friendly environment.
b) Which are the determining criteria for compa-
nies that will be subject to the rules of a mandatory CCTB/
CCCTB. Whether non-qualifying companies should still be
given the possibility to opt for applying the common rules.
1
documents/taxation/company_tax/fairer_corporate_taxation/
com_2015_302_en.pdf
c) Whether a ‘staged’ approach, whereby priority
will be given to agreeing the tax base before moving to
consolidation, would be a preferable way forward.
d) Whether, in the short-term, it would be useful to
agree on common rules for implementing certain interna-
tional BEPS-related aspects of the common tax base pur-
suant to the current proposal until the Commission adopts
the new (revised) CCTB/CCCTB proposal.
e) How should the debt bias issue be addressed?
f) Which types of rules would best foster R&D acti-
vity.
g) Whether a cross-border loss relief mechanism
aimed at balancing out the absence of consolidation be-
nefits during the first step (CCTB) could help in keeping the
business in the CCCTB 2.
As outlined by Piergiorgio Valente, Chairman of ANDAF’s
(Italian CFO Association) Tax Committee, one of ANDAF’s
main concerns on the topic is the fact that the CCCTB is
not, or shall not be, in and of itself, a tool to counteract
base erosion and profit shifting. It is ANDAF’s understan-
ding that the CCCTB should revert to its original aim (ad-
dressing cross-border tax obstacles): by reducing admini-
strative costs, compliance burdens and legal uncertainties
(Transfer Pricing related matters/the off-setting of losses in
Member states).
Another point of concern for ANDAF regards the fact that
the Commission envisages re-launching the CCCTB in a
two-staged approach.
The first stage would not include consolidation but only
agreement on the tax base. Under the latter staged appro-
ach, consolidation would be available to companies only in
a second phase. We would start by having a CCTB followed
by a CCCTB.
It is ANDAF’s view that, for the sake of ensuring a level
playing field within the EU, a specific timeline should be
agreed upon preliminarily to limit the possibility that
Member States postpone consolidation as they deem con-
2
tions/tax/relaunch_ccctb_en.htm 30
ANDAF CONTRIBuTION TO ThE
Eu CONsuLTATION ON ThE CCCTB
by PIERGIORGIO VALENTE
Chairman IAFEI International Tax Committee Managing Partner of Valente Associati GEB Partners
March 10, 2016