The current Bulgarian presidency of the EU Council has put forward a number of alternative approaches to calculating the EU common corporate tax base (CCTB), inviting member states to evaluate the impacts on their national tax revenues, before tackling the more controversial issue of consolidation. These include calculating the tax base:
with and without the Commission’s proposed turnover threshold of €750m, removal of which the Bulgarian presidency has said would ‘simplify negotiations’;
using a transactional approach, involving ‘revenues less exempt revenues, deductible expenses, and other deductible items’;
using a balance sheet approach, defined as ‘the difference between the carrying amount of (net) business assets at the end of the tax year and the carrying amount of (net) business assets at the end of the preceding tax year, plus the value of any repayments of nominal capital and profit distributions made during the tax year and minus any additions to business assets’;
with and without the inclusion of acquired goodwill as individually depreciable assets; and
leaving out the Commission’s proposed tax incentives, such as R&D reliefs.
The Bulgarian presidency is attempting to define the common tax base as broadly as possible, before moving on to the more controversial aspect of consolidating companies’ profits and losses across the EU to arrive at the CCCTB.
The current Bulgarian presidency of the EU Council has put forward a number of alternative approaches to calculating the EU common corporate tax base (CCTB), inviting member states to evaluate the impacts on their national tax revenues, before tackling the more controversial issue of consolidation. These include calculating the tax base:
with and without the Commission’s proposed turnover threshold of €750m, removal of which the Bulgarian presidency has said would ‘simplify negotiations’;
using a transactional approach, involving ‘revenues less exempt revenues, deductible expenses, and other deductible items’;
using a balance sheet approach, defined as ‘the difference between the carrying amount of (net) business assets at the end of the tax year and the carrying amount of (net) business assets at the end of the preceding tax year, plus the value of any repayments of nominal capital and profit distributions made during the tax year and minus any additions to business assets’;
with and without the inclusion of acquired goodwill as individually depreciable assets; and
leaving out the Commission’s proposed tax incentives, such as R&D reliefs.
The Bulgarian presidency is attempting to define the common tax base as broadly as possible, before moving on to the more controversial aspect of consolidating companies’ profits and losses across the EU to arrive at the CCCTB.
