European Commission's Research: EU To Benefit From CCTB & CCCTB

The European Commission released a report that investigates the economic impact of the common corporate tax base (CCTB) and a common consolidated corporate tax base with formula apportionment (CCCTB) within the EU. The paper concludes that the policy would result in a fairer and more efficient tax system and could have positive impact on GDP and welfare.

Harmonizing Tax Base in the EU

Harmonizing the tax base results in a base broadening for some countries and a narrowing for others. On the EU-average, the net effect is a narrowing of the tax base. The corporate tax rate is adjusted to maintain constant corporate tax revenues ex-ante, i.e. prior to behavioral changes, the paper states.

Common Tax Base

The report claims that the common tax base simulations directly affect the cost of capital, which on average falls across the EU, boosting investment, and therefore driving the increase in GDP. This is particularly the case under CCTB, but results vary across countries. Wages and employment also rise, further stimulating GDP and welfare.


The paper also addresses proposals to reduce the debt bias in corporate taxation by employing an applied general equilibrium model (CORTAX). It covers all EU Member States and features different firm types, while modelling many key features of corporate tax regimes, including multinational profit shifting, investment decisions, loss compensation and the debt-equity choice of firms.

Sources: EC - Modelling Corporate Tax Reform in the EU

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