The Commission’s ‘one stop shop’ of Corporate Tax Harmonisation – Why the CCCTB Proposals are desirable for EU Integration.

By Cara Mooney

The Common Consolidated Corporate Tax Base (CCCTB), first introduced in 2011 and relaunched in 2016 is an attempt by the Commission to harmonise corporate taxation within the EU, to provide a sort of ‘one stop shop’ if you will. The Lisbon Goals, declared in March 2000 aimed for the European Union to become the “most competitive and dynamic knowledge based economy in the world” and the Commission recognises that such a goal cannot be achieved without reform of corporate taxation (McLure, 2008). The CCCTB is a favourable proposal as not only does it provide greater efficiency for both multinational companies (MNCs) and Member States alike, it also decreases the likelihood of revenue loss to tax havens, or as some like to call it; ‘Moneyland’ (Bullough, 2018). Yet it hasn’t all been smooth sailing as Ireland has taken a strong dislike to the Commission’s proposals. If reform in corporate taxation is a necessary objective for better integration, it might be time for the Commission to go back to the drawing board.

In short the CCCTB consists of a “single set of rules to calculate a companies’ taxable profits in the EU” (European Commission, 2016), each company would determine its EU wide consolidated profits, which are then allocated to Member States on the basis of an apportionment formula, with Member States retaining the ability to set its own tax rate (Bettendorf et al, 2010), “as is their sovereign right” (IIEA, 2017). The objective is the elimination of tax obstacles in a single market with a view to enhancing its effectiveness (Perna & Cerioni, 2012).

The CCCTB proposals are extremely pro-business, aimed at improving efficiency. Business will become cheaper and easier to do as administration and compliance costs should decrease by 8% as companies are now only dealing with one system (European Commission, 2016). The option to offset profits in one Member State against losses in another along with the elimination of double taxation will lead to an increase in cross border economic activity, a strengthening of the single market and ultimately greater integration (McLure, 2008). This improves efficiency and growth potential for both multinationals and Member States as it will support jobs and investment. But, how will it do this? Through the ‘one stop shop’ which follows predictable rules and reduced administration costs, the EU will become a more attractive place in which to invest and do business (European Commission, 2016) leading to a growth in job creation and challenging problems that necessitate a common approach (Timmermans & Moscovici, 2016) will ultimately lead to a better integrated single market.

One may recognise that not only does the CCCTB provide economic benefits in terms of greater efficiency, but it can also play an important social role in terms of improving “general tax payer morale” (IIEA, 2017) by helping to curb tax avoidance by large multinationals. Right now, the general public conception is that MNCs do everything in their power to avoid paying tax. This is an understandable position to take and one which is backed up by revelations from the ICIJ. Through the well-known Paradise Papers leak, we are aware that companies and aggressive tax planners are taking advantage of mismatches between national systems, such as Nike, who built a portfolio of $6.6 billion through the manipulation of tax structures in the Netherlands (Bowers, 2017). The CCCTB removes transfer pricing, preferential regimes and contains stringent anti-abuse measures (IIEA, 2017). In today’s vast “spiders web” of tax avoidance schemes (The Spider’s Web: Britain’s Second Empire, 2018), the CCCTB has promising potential to bring it to a standstill.

With all the seemingly positive potential surrounding the CCCTB, why does it face so much criticism from countries such as Ireland? It is important to recognise that the CCCTB does not come without its pitfalls, and is not a perfect solution to a complex and contentious issue. The Irish Government is of the strong opinion that the CCCTB impinges on national competency in the area of taxation and will lead to a narrowing of the Irish tax base (Houses of the Oireachtas, 2016). Many MNCs have set up shop in our small, open economy in order to avail of our low corporate tax rate whilst producing products for export. Therefore, the use of sales in the apportionment formula in order to calculate a company’s consolidated tax base will inevitably reduce the amount of income available for taxation (IIEA, 2017). Larger countries such as Germany and Spain would receive larger tax bases, whilst smaller countries lose out (Feust et al, 2007). Fears that the CCCTB will have the ultimate effect of increasing our tax rate and reducing FDI in turn are widely felt. Although this does appear detrimental to Irish tax revenue and potentially our tax rate, Ireland has generated substantial hostility from other member states, getting a large part of the blame for the ‘race to the bottom’ phenomena in tax competition (Sweeney, 2010). It might be time for Ireland to start engaging with EU officials in order to reach agreement on the CCCTB to best protect our interests whilst working in the spirit of the union, furthering integration in the single market and enhancing its effectiveness.

European integration is paramount to the successful future and functioning of the European Union. The current shape of each Member States corporate income tax systems have been designed for totally independent nations and not “for members of an economically integrated union” (McLure, 2008). Without harmonisation in this area, the commitment to create a fully integrated single market is unfeasible and its operation will remain suboptimal (Sweeney, 2010). Just because one perceives the Union to be doing well, does not give room for pause (Juncker, 2017) and Ireland is in need of a wakeup call that the CCCTB may just be inevitable. Although the CCCTB faces formidable economic and political challenges (Feust et al, 2007), if greater integration and an enhanced single market is the order of the day, the Commission’s “one stop shop” may just be the answer.


  • McLure, Jr, C.E., 2008. 5 Harmonizing Corporate Income Taxes in the European Community: Rationale and Implications. Tax Policy and the Economy22(1), pp.151-195.
  • Bettendorf, L., Devereux, M.P., Van der Horst, A., Loretz, S. and De Mooij, R.A., 2010. Corporate tax harmonization in the EU. Economic Policy25(63), pp.537-590.
  • European Commission. (2016) ‘Commission proposes major corporate tax reform for the EU’. Available at: 27 February 2020)
  • European Commission. (2016) ‘Common Consolidated Corporate Tax Base (CCCTB)’. Available at: 27 February 2020)
  • Barry, F. (2010) “The case against corporation tax harmonisation and tax-base consolidation: a view from Ireland”,Transfer: European Review of Labour and Research, 16(1), pp. 71-80
  • Houses of the Oireachtas, Joint Committee on Finance, Public Expenditure and Reform and Taoiseach (2016) “Report under Dáil Standing Order 114 and Seanad Standing Order 107 on COM (2016) 683 & COM (2016) 685 – Proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB) & Proposal for a Council Directive on a Common Corporate Tax Base (CCTB)”. Dublin: Houses of the Oireachtas.
  • Feust, C., Hemmelgarn, T. and Ramb, F. (2007) “How would the introduction of an EU-wide formula apportionment affect the distribution and size of the corporate tax base? An analysis based on German multinationals”, International Tax and Public Finance, 14(5) pp.606-626
  • Juncker, J. (2017) “State of the Union Address”. Brussels: European Commission Press Release Database. Accessed at: 27 February 2020)
  • Sweeney, P. (2010) “Ireland’s low corporation tax: the case for tax coordination in the Union”, Transfer: European Review of Labour and Research, 16(1), pp. 55-69
  • Timmermans, F. and Moscovici, P. (2016), Letter to Senator Denis O’Donovan, President of Seanad Eireann, 20 March.
  • Bullough, O. (2018), ‘Moneyland, Why Thieves and Crooks Now Rule the World and How to Take it Back’, Great Britain: Profile Books Ltd.
  • The Spider’s Web: Britain’s Second Empire, (2018) Michael Oswald [Documentary]. YouTube. Available from:[Accessed 11 October 2019].
  • Perna, R and Cerioni, L. (2012) ‘The new CCCTB proposed scheme: an opportunity for cross-border business, a challenge for the national Judge”, Association of European Administrative Judges Taxation Law Working Group.
  • The Institute of International and European Affairs (IIEA). (2017) ‘The Common Consolidated Corporate Tax Base (CCCTB) – Will this time be different?’. Available at: 27 February 2020)
  • International Consortium of Investigative Journalists, Bowers S. (2017), ‘How Nike Stays One Step Ahead of the Regulators’, 6 November. Available from: 28 February 2020)



Cara Mooney is a final year BCL (Law with Politics) student in UCD and former committee member for the 163rd session of the Literary and Historical Society. This blog post discusses the CCCTB proposals and how they may impact on further EU integration. It was written as part of coursework for the module ‘Introduction to EU Politics’ – INRL20160.

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