An evaluation of the effects of the European Commission's proposals for the Common Consolidated Corporate Tax Base

Abstract

This paper evaluates the Common Consolidated Corporate Tax Base (CCCTB) recently proposed by the European Commission. We find that if the CCCTB is introduced as it is currently proposed (including loss consolidation), then it is likely to impose large tax revenue costs of about one fifth of the corporate tax base. Second, we show that an application of the CCCTB proposals at only the European Union (EU) level would overlook the extent of profit shifting out of the EU and could lock in further unnecessary revenue losses. Third, major EU profit-shifting countries such as Luxembourg, Ireland and the Netherlands may experience significant revenue losses. Based on our analysis, the main policy recommendation is to consider extending the approach to a worldwide system, which would simultaneously deal with profit shifting within and out of the EU, and appears to offer the best prospect for revenue-positive, welfare-enhancing reform. For this to be viable, an immediate priority is to collate cross-country-comparable data and provide precise assessments of the range of policy scenarios.

Divisions: College of Business and Social Sciences > Aston Business School > Economics, Finance & Entrepreneurship
College of Business and Social Sciences > Aston Business School
Additional Information: Transnational Corporations holds the copyright for all published articles.
Full Text Link: https://unctad. ... 2021d1a2_en.pdf
Related URLs: https://unctad. ... 8-2021-number-1 (Publisher URL)
PURE Output Type: Article
Published Date: 2021-04-30
Accepted Date: 2021-02-15
Authors: Cobham, Alex
Jansky, Petr
Jones, Chris (ORCID Profile 0000-0003-1115-6409)
Temouri, Yama (ORCID Profile 0000-0003-3014-258X)

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