IAS/IFRS: A Starting Point for the CCCTB?

The European Commission has proposed a Common Consolidated Corporate Tax Base (CCCTB) to be applied in the European Union (EU) in order to harmonize and provide a single set of rules to calculate the corporate tax base.

In the CCCTB framework, only a single set of tax rules is applied, and the harmonization would only concern the calculation of tax base. International Accounting Standards and International Financial Reporting Standards (IAS/IFRS) are developed by the International Accounting Standards Board (IASB) in order to create high-quality, harmonized, and globally accepted accounting standards.

Since 2005, in the EU publicly traded companies have had to prepare their consolidated financial statements in accordance with IAS/IFRS as enforced in the EU. Originally, IFRS were considered a possible starting point for creating the CCCTB, but they were not used in defining the common tax base and no formal linkage between IFRS and the CCCTB was created. The aim of this article is to discuss the reasons why IAS/IFRS were only applied as a starting point of the CCCTB, not as a financial accounting system for the CCCTB. In addition, some similarities between the systems are reviewed, and it is considered how IAS/IFRS could serve as a source of information for the CCCTB application.