The EU Commission has published a taxation working paper containing a detailed analysis of the potential impact the introduction of the European Commission proposal for a Common Corporate Tax Base that was relaunched in 2016 would have on the tax burden of corporations.
The executive summary sets out that the aim of the study is “to evaluate the impact [of the proposal]…on the effective corporate tax burdens in the 28 EU Member States and to assess the relative importance of single elements of the harmonised tax base”.
The study demonstrates that, when incorporating the Allowance for Growth and Investment provided for in the proposal as a means of interest deduction and the research and development incentives, there is an average decrease in effective tax burdens of 5.1%. The study determines that newly founded, profitable and growing companies would benefit from the growth and investment allowance in particular.
In a situation where national research and development incentives already apply, it was found that introduction of the CCTB would still reduce the effective tax burden by an average of 3.9%.
The CCTB proposal was listed as a priority by the Romanian Presidency and is the subject of ongoing discussion at the EU Council.