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

ased on the OECD definition, but more detailed and/or uniform criteria could be
established by means of the comitology procedure.
There would be no withholding taxes or other forms of taxation at source on
payments of any kind made between taxpayers belonging to the same
consolidated group. No decision, on the other hand, has yet been taken on
payments made between two single taxpayers or separate consolidated groups,
and this matter is currently the subject of a consultation process. 14 Withholding
taxes and other taxation at source on payments made by a taxpayer to a nontaxpayer,
whether EU-resident or not, would continue to be governed by the
applicable national, Community or treaty provisions, as appropriate.
(There have been numerous comments, especially from the Member States, on the
lists, the need for common criteria, the treatment of transparent entities and the
definition of a permanent establishment. Business Europe has expressed support
for the elimination of withholding taxes on payments between taxpayers in
separate consolidated groups too.)
3. The common tax base
The tax base of individual companies: Unless otherwise provided in the context
of consolidation, the calculation of the tax base would be the same for all
companies that had opted into the CCCTB, whether or not they were eligible for
consolidation 15 . It would be calculated as the difference between income subject to
tax less exempt income (net of VAT and other taxes and duties) and deductible
expenses and other deductible items (net of VAT, unless the VAT were nondeductible),
calculated on an annual basis.
(The tax year would be any 12-month period; detailed rules on opening and closing
years and changes of tax year would still be required).
Income would be defined to include income of any kind, whether monetary or nonmonetary,
including not only trading income but also proceeds from the disposal of
assets and rights, interest, dividends and other profit distributions, royalties,
subsidies and grants, gifts, compensation and ex gratia payments. Income would
not include equity or loans raised by the taxpayer.
Both for the sake of adherence to the principle of a broad tax base and low tax
rates and because of the difficulty involved in harmonising excessively divergent
approaches, the definition of taxable income would be as broad as possible, and
exempted forms of income would be kept to a minimum.
14 The choice here is between (a) eliminating taxation at source in respect of such payments and (b)
introducing common rules on taxation at source and on double-taxation relief for the recipients of such
payments. The latter solution would, in turn, raise the question of the apportionment of withholding tax and,
in the case of a consolidated recipient, the cost of granting credits.
15 Under the reserve of the debate on the above mentioned thresholds.
8