Group Taxation and the CCCTB

Abstract:     
The future of domestic and European group taxation is widely debated in political and business circles, as well as in the academic world. This article addresses the numerous political and systematic issues of group taxation through a three step approach. First, it defines the diverse fundamental demands that consistent regulatory framework for group taxation must meet. On the basis of these demands, the paper evaluates in a second step the state of the law concerning the taxation of corporate income that apply to company groups on group taxation and formulates reform needs.

The starting point for an analysis of the existing corporate income tax law is the question whether and to which extent in group structures the multiple taxation of a subsidiary’s profit should be avoided when it comes to distributions to the parent company. In order to fully apprehend the legal situation, it is necessary to address not only the economic reality of international groups, but also the demands by EC law for a nondiscriminatory taxation of cross-border company structures that require the legislator to define group taxation law from the beginning in a European way, if not even in a global way. The precariousness of the state of group taxation led the European Commission to develop a concept for a uniform tax base for cross-border group enterprises, which – in a third step – is being examined by the paper from different perspectives: These regard amongst others the mandatory or optional character of such rules, the definition of the “group,” the basis of taxable income, techniques of consolidation and the applicability of attribution factors. As the analysis reveals, the size of the challenges of a uniform tax base for cross-border group enterprises is ultimately a reflex of the size of the problems that face corporate tax law in Europe.

Number of Pages in PDF File: 39

Keywords: International Tax Law, Corporate Tax Law, Company Groups, Business Tax, Tax Competition, EC Law

Accepted Paper Series