An outline of the CCCTB (Common Consolidated Corporate Tax ...

CCCTB regime. Other taxes (non significant revenue, with thus a limited impact on
CCCTB) would still be deductible under CCCTB regime.
Fixed business assets would be tangibles, intangibles, financial assets and
proprietary benefits acquired by the taxpayer where they were capable of being
valued and were used for business purposes for more than 12 months. Where the
cost of its acquisition, construction or improvement was EUR 1 000 or more, such
cost would be depreciable; if not, it would be immediately deductible.
(Some assets, such as yachts and hunting and fishing rights are currently the
subject of discussion. Such assets are sometimes considered to be inherently nonbusiness
assets).
Tangible assets not subject to wear and tear and obsolescence, such as land, fine
art and antiques or jewellery and intangible assets with an indefinite life and also
financial assets would not be depreciated unless the taxpayer demonstrated that
such an asset had permanently decreased in value. Financial assets in respect of
which any gain would be exempt would not be depreciable in any circumstances.
Recognition and timing: Income and expenditure would be recognised on an
accruals basis in the tax year to which they related. This reflects the IFRS
framework and general accounting practice. Each expense and its amount should
be established in order to be accrued. However, when an amount arising from a
legal obligation (the Member States are satisfied that these provisions would be
confined to legal or equivalent obligations) could be reliably estimated, the expense
would be deductible in the current tax year. Obligations that had accrued during the
current tax year or in previous tax years in respect of future pension payments
would be deductible. (It is most certainly desirable to arrive at uniform treatment of
the various pension schemes, but some Member States take a narrower view!)
However, it is obvious that at the time the CCCTB come into force, the future
pension payments should be deductible, except any recapture for the past. All of
these amounts would be reviewed and adjusted on an annual basis.
It has been suggested that a general correspondence principle be adopted
(“matching”), whereby all costs would be assigned to the same tax year as the
income to which they related.
The total amount of deductible expenses for a tax year would be increased by the
value of inventories at the beginning of the tax year and reduced by the value of
inventories at the end of the tax year.
For long-term contracts, the principle laid down in IAS 11 would be followed,
whereby the percentage of the income and expenditure assignable to each tax
year is determined by the progress towards completion of the contract work.
Provision for bad debt would not be deductible unless an amount corresponding to
the receivable had previously been included in the tax base and the taxpayer had
taken all reasonable steps to pursue the payment.
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