Joint Taxation in EU: A Comparative Analysis of the Directive CCCTB in Relation to the Danish Rules about Joint Taxation

Christina Neermann Thykier & Trine Arentzen Lander

Student thesis: Master thesis


The tax area in the EU is far from being harmonized. Even though the EU in 2001 started working towards full harmonization. It became clear to the international community that the current rules for corporate taxation no longer fit the modern context. Generally, corporate income is taxed at national level, but the economic environment has become more globalised, mobile and digital.1 The European Commission published on October 25, 2016 a proposal to a directive on a Common Consolidated Corporate Tax Base (CCCTB). The objective of present thesis is to analyze the motives for the proposed directive CCCTB, and which consequences it will have for corporate groups. The thesis describe the Danish rules about international joint taxation and the new rules the directive regarding the joint taxation of corporate groups in the EU. After having described the rules, the thesis will compare the rules in the main areas. The purpose it to present an overview of how the proposed directive CCCTB will affect the corporate group. According to the proposed directive the rules only apply to companies based in European countries. In that respect, the proposed directive separates significantly from the Danish rules about international joint taxation, where companies must include all tax subjects belonging to the corporate group. The requirements for a mother company with influence over a subsidiary are stricter in the proposed directive. Another major difference is that companies in the EU, will only have to use one corporate tax system rather than 28 divergent corporate tax systems. This will reduce the risk of over taxation and double taxation which means that the corporate group must calculate their consolidated taxable income, between the companies according through the formulary apportionment. The formula apportionment for the consolidated tax base is comprise three equally weighted factors, namely labour, assets and sales by destination. Those equally weighted factors reflect a balanced approach to distributing taxable profits amongst the relevant Member States and is ensure that profits are taxed where they are actually are earned. This is very different from the rules in SEL ยง 31 A, and may be one of the most difficult things, for the countries to accept. Altogether some of the proposals in the directive have a lot of advantages for the companies.

EducationsMSc in Auditing, (Graduate Programme) Final Thesis
Publication date2017
Number of pages124