A Legal and Economic Assessment of the Commission's Proposal for a C(C)CTB

Oliver Andreas Hansen

Student thesis: Master thesis


The issues regarding the current tax system in Europe, has led to several obstacles in the internal market. Compliance cost regarding multinational companies’ compliance with up to 28 different tax systems, has caused not only high costs, but also aggressive tax planning structures and tax evasion. The globalization and digitalization has increased mobility and cross-border activity. Meanwhile the Tax systems have not followed the same development and are therefore not compliant with the current obstacles hindering in the internal market. With the abovementioned obstacles in mind, the Commission relaunched the CCCTB draft proposal, into two separate proposals in 2016. The purpose of this thesis is to analyze whether the Commission has prepared the proposals under applicable law regarding the compliance with the principle of subsidiarity and the principle of proportionality and the usage of these in protocol nr. 2. Furthermore the thesis analyzes how the decision-making process is, based on the legal basis presented by the Commission. The thesis is divided in four parts. This includes the scope and frames, a legal analysis, an economic analysis, and a combined analysis. The combined analysis integrates the findings from the two others, and use economic efficiency theory, two illustrate how the legal propose should be. The legal analysis concludes that a regulating regarding direct taxation is tough, based on the national sovereignty in this area. However, the Commission has conferral to regulate regarding obstacles in the single market, which demands that the two principles are respected. The analysis finds, that the impact assessment does not detailed states why the principles are respected in regards of a situation where only CCTB is adopted, why the requirements in protocol nr. 2 are not met. From the economic analysis, the behavior of member states and companies shows that both actors are profit maximizing, which has led to self-promoting decisions causing these market obstacles and the need to find a common solution. However, the profit maximizing behaviors shows that a C(C)CTB will only be possible when it has benefits for all member states. With this in mind, the combined analysis shows some alternative solutions on how the proposal should be formed to meet applicable law and possibility of being adopted.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
Publication date2018
Number of pages72