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

Depreciation in respect of business assets would be deducted exclusively by the
economic owner of the asset, in other words the person who enjoys the benefits
and incurs the risks attaching to an asset. If a single economic owner could not be
identified, depreciation would be deducted by the legal owner.
The acquisition cost of intangible assets would be depreciated individually on a
straight-line basis over the period for which the asset enjoyed legal protection or for
which the right was granted or, if that period could not be determined, for 15 years.
(This solution was well received by the Member States).
Assets depreciated on an individual basis (long term assets): The cost of
acquiring, constructing or improving a business asset would be depreciated
individually on a straight-line basis
- at 2.5% per tax year in the case of buildings, and
- at 4% per tax year in the case of long-term tangible assets.
A long-term tangible asset would mean a tangible asset the useful life of which was
25 years or more (could be replaced by a 15-year reference period), or the
acquisition or construction costs of which exceeded EUR 5 000 000 (criterion that
should be abandoned).
(Several Member States commented that this amount was too high, that the cost
criterion was not linked to the useful life of the asset Business Europe took the
opposite view, commenting that the amount was too low. The Commission now
seems to be considering a 15-year threshold.)
Where an individually depreciated asset was disposed of during a tax year, its
written-down value for tax purposes would be deducted from the taxable base in
that year. If the proceeds were reinvested in a replacement asset within a certain
period, the excess of proceeds over written-down value should be deducted from
the tax base in the year of disposal and from the depreciation base of the new
replacement asset. This would mean that the taxation of gains on disposals of
assets could be spread over the lifetime of replacement assets. The same would
apply to pooled assets.
Assets depreciated on a pooled basis: The declining-balance method would be
applied at a rate of 20% per annum, and proceeds from disposals would be
deducted from the residual value of the pool.
(Business Europe asked for this rate to be raised to 30% because the decliningbalance
method diminished the effective depreciation rate from year to year.)
The depreciation base would be the written-down value of the assets pool at the
beginning of tax year plus the acquisition, construction or improvement costs of
business assets acquired or created during the year, less the proceeds from
disposals of business assets and the sum of any compensation received for the
loss or destruction of such assets during the tax year. If the depreciation base thus
calculated were a negative amount, a balancing figure would be added to bring the
depreciation base to zero, and the same figure would be added to the tax base. If
14