ACCA welcomes European Commissioner for taxation Algirdas Šemeta's publication today of a proposal for a Directive on a Common Consolidated Corporate Tax Base (CCCTB). For the global accountancy body, the European Commission rightly proposed that member states should maintain the ability to set their own tax rates (thus maintaining some control over tax revenues), and make the CCCTB available to companies, which then could decide which tax regime to adopt.

Chas Roy-Chowdhury, head of Taxation at ACCA (the Association of Chartered Certified Accountants), says: "ACCA shares the Commission’s view that simplifying procedures, improving efficiency and reducing compliance costs in taxation matters are of the essence to strengthen the Internal Market. A clear, simple and user-friendly CCCTB - providing that it remains voluntary for a Member State to decide the approach that best fits its own national budgetary needs and tax policy mix - would help enhance the competitiveness of European businesses, especially Small and Medium Enterprises (SMEs), and attract investment."

Deeper coordination of national tax systems in Europe - and more specifically the lack of a true Single Market for direct taxes - has always been one of the most controversial topics in the history of the EU. This is especially true at a time of a more and more globalised world that witnesses EU-based companies increasingly operating across borders.

"Albeit recognising the need to be realistic regarding the existing resistance from several member states, ACCA believes that the CCCTB is a useful option to addressing the underlying tax obstacles -such as double taxation- which exist for companies operating in more than one Member State. The "one-stop-shop" system for filing their tax returns will help reducing administrative burdens.

Another step in this direction could be realised through the Commission's proposal to create a European Private Company Statute, which is still stuck in the Council. ACCA is also a strong advocate of the interconnection of national business registers throughout the EU, and therefore welcomed the European Commission’s proposal in this respect," Chas Roy-Chowdhury explains.

"The creation of common corporate tax single set rules would allow companies to use the same methodology for calculating their profits and losses throughout the EU, as well as helping to reduce discretionary practices and thus decrease compliance costs, especially for SMEs, for which these costs are disproportionately higher. We also support "one-stop shops" for VAT and "home state taxation" principles that would provide SMEs with the right incentives to go international and make the most out of the single market, as highlighted in the Single Market Act and in the spirit of the revised Small Business Act", he added.

For ACCA, the newly-published proposal is certainly the route to go, but some implementation issues will need to be carefully watched, such as questions relating to the tax base determination (IFRS versus national GAAP debate). Effective implementation will also require enhanced cooperation between the various national tax authorities responsible for coordinating the appropriate checks and follow up on the return. In addition, in line with the move to smart regulation, it would be useful to ensure that the new IMI (Internal Market Information) system will be applicable to the exchange of information under the CCCTB Directive.

"We need to make sure that enterprises are taxed on the effective location of activities and to clarify the interaction between the CCCTB and other aspects of direct taxation further. Greater transparency is needed in order to ensure that competition takes place on the effective tax rate. In the current economic climate, it is also important for member states to assess the possible effects of the introduction of an optional CCTB on government revenues carefully", Chas Roy-Chowdhury concluded.