Common Consolidated Corporate Tax Base

The recent Ernst and Young report commissioned by the Department of Finance on the economic and budgetary impact of the proposed CCCTB is available here.

10 replies on “Common Consolidated Corporate Tax Base”

@Frank Barry

I reached intuitive conclusion in 2008 that this idea was ‘dead’. Scan at the figs and tables in summary – still see no possiblity of a ‘mandatory’ – and cannot see 27 signing up voluntarily. Findings here, and this is very complex analysis, not as negative for Ireland as I would have expected – and surprisingly negative for Germany, Denmark and Netherlands.

To the French I say ‘Non’ – and I can’t see the Danes or the Dutch signing up here.

Yet another treaty – and referenda – no way around here. We can still expect continuous pressure from certain EU elements on local corp tax rate.

CCCTB remains ‘dead’, imho.

@David O’Donnell

The CCCTB is still alive . An EU-wide CCCTB is dead, as Ireland and UK would veto, however a smaller group of countries may still go ahead under enhanced co-operation, which would reduce the taxable income stream that flows to Ireland.

However a new front is quickly opening up in this battle with a big German push for economic governance due later this week. This looks pretty significant, as while the EU Commission can plod along with their working group reports, most of the action is driven by the EU Council. In this case Ireland is more isolated since this proposal is mainly focused on the Eurozone countries.

The losses faced by Luxembourg because of CCCTB are interesting. This is probably due to the fact that, like Ireland, a lot of companies headquarter their activities there. With the Letzebuergish prime minister as head of Ecofin and a very well-connected politician, hopefully he can help us defeat CCCTB by lobbying other politicians around Europe.

It’s also worthy of note that the EU as a whole seems to suffer as a result of adopting CCCTB. The losers far outnumber the winners and their losses far outweigh the gains. This confirms my view that CCCTB is not only a bad idea for Ireland but a bad idea for Europe. It would run counter to the Lisbon Agenda of making Europe more competitive and simply advantage non-EU jurisdictions like Switzerland, Norway and Israel.

With Luxembourg, Britain, Romania, the Danes, Dutch and a few others, we can see off the threat of CCCTB.

@ Cathal.
I’d bear in mind that this was a commissioned study. No disrespect to anybody, and I haven’t had time to think about it in any great detail, but there’s probably always truth to the proverb “who pays the piper…”.

IMHO it is alive, it will never die, but it has a very low chance of ever becoming reality.

What will stop it happening will be infinite complexity and uncertainty of outcome of any proposed scheme, risk aversion on the part of Reveneue authorities based on that, interminable working party discussions (they also serve who only sit and talk), and sufficient business objections across Europe to the costs and possible outcomes of any proposals.

That said, Ireland needs to be eternally vigilant.

Are all those who want to ensure that we maintain our independence on Corporate tax also OK with corporations who avoid paying the very low 12.5%?

Last year we collected 3.923billion in Corporation Tax. How much of this was from the foreign owned MNC’s who account for 90% of our exports and at what average rate did they pay?

Genuinely interested in the answer.
However I doubt we are supposed to know.

@Brian G

Ta for Spiegel link: Yes – ‘Economic Governance’ a bigger issue – part of the Nicolas/Angela tango – …………..

Somwhat concerend at the speed with which Fine Gael appear willing to sign up to ‘binding’ structural_fiscal/deficit rules a la Germany to be enacted in legislation here …….. slowly, slowly ………….. yet there has to be more coordination in economic gov across Europe ………

BIG one is that Angela needs to get real on Europe’s bad banks, including German ones, and French ones, and Italian ones, and Irish ones, etc ……… 2013 is too late ………

Thanks very much Frank.
I see the author is very clever in presenting figures without answering either of my questions.

Did anyone ask him why these two very simple easily calculable and informative figures were not included?

I’m still at a loss to see why Irish objections to CCCTB are so fierce. If the CCCTB is voluntary for companies, and companies quarter themselves in Ireland for the low tax rate, why would they want to sign up to pay higher taxes?

Who leads Irish objections? Is it perhaps the corporate consultancy sector, who would certainly lose money through reduced complexity of multinational company accounting?

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