The European Economic and Social Committee (EESC) adopted a favourable opinion on a proposed Council Directive on a Common Consolidated Corporate Tax Base (CCCTB) because, according to its members reduces tax obstacles and costs associated with cross-border activities, promoting fair, sustainable competition.

The European Economic and Social Committee (EESC) adopted a favourable opinion on the Commission proposal for the Council Directive on a Common Consolidated Corporate Tax Base (CCCTB). The proposal was presented by the Commission in April 2011. Members consider that the legislative act, will have, even in the medium term, a beneficial effect on growth and jobs because the CCCTB reduces tax obstacles and costs associated with cross-border activities, promoting fair, sustainable competition.

Although the EESC agreed with the proposal in general terms, members also considered that the draft directive does require a few changes, and further clarification of certain details. First of all, the EESC recognises that there is a concern that the CCCTB would entail a loss of national sovereignty. Nine parliaments of Member States believe the proposal does not comply with the principle of subsidiarity, limiting tax policy choices. That is why Member States will remain free to set the tax rate on their share of the tax base. Moreover, there is a danger that, in the rapidly changing competitive global economy, a CCCTB system for 27 Member States could mean that the EU is not able to respond quickly to global tax changes or incentive packages, which could result in a loss of foreign direct investment.

Additionally, following a debate on this issue, the Committee agreed in not calling for the immediate mandatory application of the CCCTB, but would rather endorse an optional arrangement during the introductory phase. In the long term, the CCCTB should be mandatory, at least above a certain threshold, for businesses operating across borders.