The European Union recently published detailed proposals for a Common Consolidated Corporate Tax Base (CCCTB). This would be an optional system under which companies could elect to make a single calculation of taxable profit for the EU, under a single set of rules and filing a single return.

The tax base so calculated would be apportioned amongst the Member States of the EU under a fixed formula (essentially looking at fixed assets, labour and location of sales). The proposal will now be discussed in the European Parliament and then needs to be agreed by the governments of the Member States in Council.

The Dutch government mentions a number of objections which are summarised below.

CCCTB will result in a reduction of investment and in a reduction of GDP.
Compliance costs for governments will increase as EU countries will have to run two tax systems at the same time, i.e. the local tax system and the EU tax system.
The allocation keys ignore key value drivers such as intangibles and financial assets.
Concerns about the proposed rule that the country of the EU top holding is leading. If this country is not capable of performing in-depth tax audits, it will have an effect on the entire European taxable income.