In a press conference in Brussels yesterday, European Commissioner Pierre Moscovici outlined the EU's latest proposals on corporate tax reforms, with a renewed plan for a common consolidated corporate tax base (CCCTB).

Fourth time lucky?

This is an initiative that has already been put forward in 2001, in 2007 and in 2011 but Moscovici said the executive is hoping that the tax scandals in recent years (from large corporates paying very little tax, to leaked data such as the 'Luxleaks' scandal and the Panama papers) have changed public and political sentiment towards corporate taxation.

A fair tax?

The current plan aims to provide a single, EU-wide definition of taxable profits and, secondly, to establish a system for redistributing corporate tax revenue between EU member states.

Moscovici expressed the hope that the proposals “will put fairness at the heart of corporate taxation in the EU” and said he hopes to implement the EU-wide corporate tax regime by 2021, adding that “the CCCTB will also be a powerful tool against tax avoidance”.

Under the current proposal, the CCCTB will be applied to businesses with annual revenues greater than €750 million and will be mandatory for multinationals (in the previous proposal it was optional). This, Moscovici said, will prevent the large-scale tax avoidance that has been in the spotlight lately, and secure a more level playing field for all companies in the EU.

CCCTB now more relevant than ever

But with the failure of past attempts to galvanise EU member states on agreeing on a CCCTB, why does the EC think the proposals might be welcomed in 2016? Moscovici said: “a lot has changed since 2011 – in our approach, in the proposal and in the political landscape. The CCCTB is more relevant today than ever, and I am confident that we have the right conditions today to make it a reality.”

The new tax proposal breaks the transition to a CCCTB down into two steps, which Moscovici calls “much more manageable, though no less ambitious”. He also said it will “simultaneously support business, attract investors, promote growth and stop large-scale tax avoidance.”

Can it be implemented by 2021?

Some have criticised the €750 million threshold as being too high. To be implemented at an EU level, the proposal will need to be adopted by a unanimous vote in the Council. An enhanced cooperation agreement between supporting member states could be an alternative if there is no unanimous agreement.

The Commission has also been working to push through a Financial Transaction Tax but talks on this have not made progress and there has not been unanimous support for the initiative. Despite this Moscovici has said he hopes that the FTT talks can reach a conclusion by the end of this year.

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CTMfile take: Does the Commission's proposal have teeth this time round? In the wake of numerous scandals involving corporate tax and tax havens, there may be more public and political will to see this through. Moscovici also said the CCCTB will promote competition and growth for businesses. CTMfile would love to hear what you corporates think about this. Would you welcome a common tax base within the EU? Do you think the €750 million is an effective threshold?