Press Release: Company taxation/Common Consolidated Corporate Tax Base: The European Commission presents a progress report on the preparatory work made before finalising its proposal due in 2008

Following a first progress report in 2006 (IP/06/448), the European Commission has adopted a second Communication on the progress towards a Common Consolidated Corporate Tax Base (CCCTB). The Commission in this Communication draws the attention of the other EU institutions to the work that has been done and the work that has to be done at experts level, identifying the problems and the possible options to solve them, before making a formal proposal in 2008. The CCCTB would enable companies to follow the same rules for calculating the tax base for all their EU-wide activities, rather than in accordance with the existing 27 systems, thereby simplifying procedures, improving efficiency and reducing compliance costs (IP/04/1091). The consolidated tax base would be distributed between Member States in accordance with an agreed fair sharing mechanism which will also form part of the proposal. Member States will retain full sovereignty over their tax revenues as they will continue to set their own national tax rates. The Commission confirmed that it will not make any proposal on harmonizing tax rates.