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Common Consolidated Corporate Tax Base

This summary has been archived and will not be updated, because the summarised document is no longer in force or does not reflect the current situation.

Common Consolidated Corporate Tax Base

Without common corporate tax rules in the European Union (EU), the interaction of national tax systems often leads to over-taxation and double taxation, with heavy administrative burdens and high tax compliance costs for businesses. Therefore the Commission proposes a directive which would establish a common corporate tax base system and lay down rules relating to the calculation and use of that base.


Proposal for a Council Directive of 16 March 2011 on a Common Consolidated Corporate Tax Base (CCCTB).


The Common Consolidated Corporate Tax Base (CCCTB) is a single set of rules that companies operating within the European Union (EU) could use to calculate their taxable profits. This would mean that a company would only have to comply with one EU system for computing its taxable income instead of dealing with up to 27 different sets of rules. The CCCTB would not affect the discretion of EU countries to set their own national rate of corporate taxation. It is not designed to harmonise tax rates, but instead would ensure consistency between national tax systems in the EU.

The CCCTB would be available for businesses of all sizes established under the laws of an EU country, so long as the company takes one of the forms listed in Annex I to this proposal or the company is subject to one of the corporate taxes listed in Annex II or to a similar tax subsequently introduced. The directive would also apply to certain companies established under the laws of a non-EU country.

A company which fulfils the above requirements and is a tax resident in an EU country may opt for the system. The company would be subject to corporate tax under the system on all income derived from any source, both inside and outside its EU country of residence. A company which fulfils the above requirements but is not a tax resident in an EU country may also opt for the system but in respect of a permanent establishment maintained by it in an EU country. The company would be subject to corporate tax under the system on all income from an activity carried on through the permanent establishment in an EU country. A company that qualifies and opts for the CCCTB would no longer be subject to the national corporate tax arrangements for all matters regulated by the common rules.

The tax base would be determined for each tax year and shall be calculated as revenues less exempt revenues, deductible expenses and other deductible items. All revenues should be taxable unless explicitly exempted. Revenues which would be exempted from corporate tax include:

  • subsidies directly linked to the acquisition, construction or improvement of fixed assets;
  • proceeds from the disposal of pooled assets, including the market value of non-monetary gifts;
  • received profit distributions;
  • proceeds from a disposal of shares;
  • income of a permanent establishment in a third country.

Subject to certain conditions, fixed assets should be depreciable for tax purposes. Long-life assets should be depreciated individually, while others should be placed in a pool. Assets not subject to depreciation include:

  • fixed tangible assets not subject to wear and tear and obsolescence such as land, fine art, antiques, or jewellery;
  • financial assets.

Losses incurred in one tax year may be deducted in subsequent years. A reduction of the tax base on account of losses from previous tax years shall not result in a negative amount.

For a subsidiary to be eligible for consolidation (group membership for companies), the parent company must have:

  • the right to exercise over 50 % of the voting rights;
  • the ownership of over 75 % of the company’s capital or over 75 % of the rights giving entitlement to profit.

The CCCTB proposal is based on the ‘all-in all-out’ approach. Companies that fulfil the requirements for forming a group have to consolidate, which implies that they may not just opt to have their individual tax results computed under the common rules.

A tax resident shall form a group with:

  • all its permanent establishments located in other EU countries;
  • all permanent establishments, located in an EU country, of its qualifying subsidiaries which are resident in a non-EU country;
  • all its qualifying subsidiaries which are resident in one or more EU countries;
  • other resident taxpayers which are qualifying subsidiaries of the same company which is resident in a non-EU country and fulfils the necessary conditions.

The consolidated tax base shall be shared between the group members in each tax year on the basis of a formula for apportionment. This formula gives equal weight to the factors of sales, labour and assets.

The proposal also details anti-abuse rules. Artificial transactions undertaken for the sole purpose of avoiding taxation shall not be taken into account in the calculation of the tax base. This does not, however, apply to genuine commercial activities where the taxpayer may choose between two or more possible transactions which have the same commercial result but which produce different taxable amounts.

The CCCTB administrative framework provides for a 'one-stop-shop' approach which would allow groups with a taxable presence in more than one EU country to deal primarily with a single tax authority across the EU. A consolidated tax return will be filed with that authority.

References and procedure


Official Journal


COM (2011) 121 final


Consultation CNS(2011)0058

Last updated: 23.06.2011