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

The fact that the EU-resident parent company was itself controlled by a non-EU
parent would not be an obstacle to consolidation of the EU-based part of the
ownership chain.
Likewise, the CCCTB would also cover a group of EU-resident subsidiaries under
the common control of a non-EU-resident parent. The fact that the ownership chain
of a group of EU companies included a non-EU link company (the so-called
'sandwich' situation) would not break the chain; this would ensure that taxpayers
did not try to split single groups into multiple groups.
A taxpayer would be part of a group from the date on which the 75%
threshold was reached, and the same would apply to a subsidiary that fulfilled the
aforementioned conditions, provided it met the criteria for at least six months. A
taxpayer would be deemed to be 75% owned and therefore included in a
consolidated group if it passed the 75% test at the beginning and at the end of the
tax year and if the level of ownership never dropped to 50% or lower at any time
during the tax year. The taxpayer would leave the group on the day when the
ownership of voting rights
- fell to 50% or below at any moment, or
- fell below the 75% threshold and remained below it until the end of the tax year.
The same would apply to a taxpayer’s subsidiaries. Companies entering and
leaving a group should therefore start to consolidate on the date they enter the
group and cease on the date they leave; their transitional tax year would thus be
split into two parts. (Business Europe finds this preferable to any other solution but
a discussion is still open regarding these rules which could thus be subject to
future amendments.)
Consolidation would not be proportional; it would cover the entire tax base
of all entities belonging to a given group, subject to the rules applicable to
transparent entities which need further clarification, and so it might not necessitate
compensation of minority interests, since each member of a group would be
apportioned a share of group profits and losses.
Losses incurred by a taxpayer before entering a CCCTB group would not be taken
into account in the consolidation. Such losses would be offset against the share of
the future consolidated profits attributed to this taxpayer in accordance with
national rules.
Where consolidation resulted in an overall loss for the group, this loss would be
carried forward at group level and set off against future consolidated profits before
the net profits were shared out (net of the loss carried forward by the consolidated
group) in order to guarantee that there were no ‘trapped' losses.
For the sake of consistency with the principle of treating a group as far as possible
as a single entity, no losses would be attributed to a taxpayer leaving a group.
When a company was disposed of, any unrelieved losses carried forward at group
level would therefore remain in the group.
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