Common consolidated corporate tax base as an option for harmonization of direct taxes in the European Union

Abstract

The article briefly analyses the major provisions of the draft directive on a common consolidated corporate tax base and the results of the working group on preparation of the Directive. The taxation of a corporate group, namely the parent and its subsidiaries, faces the tension between a legal separation, on the one hand, and economic integration on the other hand. It is noted that the tensions between the tax sovereignty of individual states and actions for development of the common market can only be improved by taking into account the views of opposing interests of each party. Apparently, the common market cannot receive automatic prevalence as its mechanisms are far from being perfect. The study concludes that there is a need to adapt the tax legislation of the Member States to the requirements of the internal market laid down in the European treaties.