Daily Tax Update - October 25, 2016: European Commission Publishes Major Corporate Tax Reform Proposals

European Commission Publishes Major Corporate Tax Reform Proposals:  Today, as part of a broader package of corporate tax reforms, the European Commission published a proposal for a Council Directive on a Common Consolidated Corporate Tax Base (CCCTB) which would apply to all groups of companies with total annual turnover in excess of EUR 750 million and a taxable presence in at least one European Union (EU) Member State.  The CCCTB includes a tool for attributing income to where the value is created, through a formula based on three equally weighted factors (i.e., assets, labor, and sales).  The proposal states that “[g]iven that Europe's priority today is to promote sustainable growth and investment within a fair and better integrated market, a new framework is needed for a fair and efficient taxation of corporate profits.”  

Additionally, the European Commission proposed a Council Directive on Double Taxation Dispute Resolution Mechanisms in the EU.  Under the proposal, current dispute resolution mechanisms would be adjusted to meet the needs of businesses more effectively.  In particular, a wider range of cases would be covered and EU Member States would have clear deadlines to agree on binding solutions to cases of double taxation.

Finally, the European Commission released its proposal to extend the rules against hybrid mismatches to hybrid mismatches involving non-EU countries. 

Miscellaneous Guidance:
Today the IRS released Revenue Procedure 2016-55, which provides the 2017 cost-of-living adjustments for inflation for certain items, including the tax tables.