Documents considered by the Committee on 7 December 2016 Contents


Summary and Committee’s conclusions

Committee’s assessment

Politically important

Committee’s decision

Cleared from scrutiny

Document details

Commission Communication about a corporate tax system for the EU

Legal base


HM Treasury

Document Number

(38209), 13729/16, COM(16) 682

19.1The Commission has recently launched four proposed Council Directives which it presents as improving the corporate tax framework in the EU. This Communication, which accompanied these proposals sets them in the Commission’s wider ambitions for taxation and summarises the case for each of them.

19.2The Government summarises its responses to each of the proposals, which it has set out more fully in the relevant Explanatory Memoranda, and we are reporting separately on those documents.

19.3Given that this document adds nothing to the four substantive proposals we clear it from scrutiny.

Full details of the documents

Commission Communication: Building a fair, competitive and stable corporate tax system for the EU: (38209), 13729/16, COM(16) 682.


19.4In June 2015 the Commission presented an Action Plan it had developed to review the corporate tax framework in the EU. It discussed a series of measures, focused on five areas for EU action: a relaunch of its proposal for a CCCTB; ensuring effective taxation where profits are generated; additional measures for a better tax environment for business; further progress on tax transparency; and EU tools for coordination. The Government told us that it would support those measures that would help to prevent aggressive tax planning by multinational enterprises and enable the international tax rules to be applied more effectively. But it emphasised that the UK would not sign up to any measure that would undermine its tax sovereignty, or damage the prospects for growth in the EU.28

The document

19.5The Commission has now presented a Communication about “building a fair, competitive and stable corporate tax system for the EU”. It sets out its agenda to make corporate taxation fairer and more effective, better adapted to the modern economy and more responsive to emerging challenges in this field. In its introduction to the document the Commission asserts that:

“Taxation is central to the EU’s work to build a stronger, more competitive and fairer economy, with a clear social dimension. Europe needs a tax system that fits its internal market and that supports economic growth and competitiveness, attracts investment, helps to create jobs, fosters innovation and upholds the European social model. Taxation should provide stable revenues for public investment and growth-friendly policies. It should ensure that all businesses enjoy a level-playing field, legal certainty and minimal obstacles when operating cross-border. It should be part of a wider tax system in which citizens have confidence, because it is fair and meets society’s socio-economic needs. The EU’s priorities in taxation are therefore focussed on these goals.”

19.6The Commission then presents short summaries of the justifications in its explanatory memoranda for four legislative proposals it has presented with its Communication:

19.7The Commission concludes:

“The Commission is proposing a comprehensive response to current and emerging challenges in corporate taxation and a positive new approach to taxing companies in the future. The CCCTB will deliver notable improvements to the EU’s corporate tax framework, in terms of simplicity, tax certainty and fairness. It will ensure that corporate taxation is aligned to the modern economy and that it supports the goal of a stronger and more competitive Single Market. The proposal on Double Taxation Dispute Resolution and the proposal to tackle hybrid mismatches with third countries, which the Commission has also presented today, will further contribute to fairer and more efficient corporate taxation in the EU. The Commission therefore calls on Member States to swiftly agree on all of the proposals presented today, so that businesses, administrations, citizens and the European economy can start to enjoy the full advantages of this fair, competitive and stable corporate tax environment.”

The Government’s view

19.8In her Explanatory Memorandum of 2 December 2016 the Financial Secretary to the Treasury (Jane Ellison) says that:

Previous Committee Reports


28 (36940), 9949/15 + ADDs 1–2: see First Report HC 342-i (2015–16), chapter 80 (21 July 2015).

29 (38210), 13730/16 + ADDs 1–3: see Twenty-third Report HC 71-xxi (2016–17) (7 December 2016).

30 (38211), 13731/16 + ADDs 1–3: see Twenty-third Report HC 71-xxi (2016–17) (7 December 2016).

31 (38214), 13732/16 + ADDs 1–3: see chapter 7 of this Report.

32 (38212), 13733/16 + ADD 1: Nineteenth Report HC 71-xvii (2016–17), chapter 17 (23 November 2016).

34 Op cit.

9 December 2016