The views expressed are purely those of the author and may not be Session 3 B - Comments Stefanie Knoth - Federal Ministry of Finance Germany The views expressed are purely those of the author and may not be regarded as stating an official position of the Federal Ministry of Finance.

The “EUCIT” Idea – Luca Cerioni General idea of this paper: A Fair EU Tax based on CCCTB CCTB is a challenging project and we should make headway here. As a theoretical consideration: The choice between the status quo and one or more EU tax(es) should be based on several criteria, of which “fairness” is definitely one. Other criteria include: ability to raise sound and sustainable revenue, low compliance costs, “neutrality”, tax certainty and, to a lesser extent, “visibility”. Corporate profits are cyclical. CIT revenue is therefore cyclical as well. Hence replacing other EU resources with EUCIT would significantly increase the cyclicality of the income side of the EU budget. Assumption in this paper: “tax competition should be avoided” versus BEPS approach: “level playing field – clear rules for tax competition”

Corporate income tax reform in the EU - Jonathan Pycroft The paper concentrates on differences in tax rates, which is one factor, among others, behind tax shifting. BEPS losses arise from a variety of causes, including aggressive tax planning by some MNEs, the interaction of domestic tax rules, lack of transparency and coordination between tax administrations, limited country enforcement resources and harmful tax practices. The “drastic policy change” – a tax shift from profits to labour – simulated in this paper would be considered less fair and therefore encounter resistance, which might result in increased compliance costs. The evaluated reforms would create significant winner and losers amongst Member States, and will therefore be quite difficult to implement.

Intangibles and Profit shifting – Diego d'Andria General finding of the paper: Policies reducing the depreciation allowances for intangibles combined with policies that directly curb profit shifting are the most effective at curbing profit shifting. However, they also involve a welfare cost. The reform simulated in this paper – reduced CIT rate (from 30% to 12.5%) and compensation of the revenue loss through increased cost of labour – is a purely academic exercise; the reduction of employment as well as the perceived reduction of fairness is not supportable from a political point of view. The heterogeneity in national tax structures as described in this paper may be read as supporting GNI-based own resources, since SNA is harmonised and GNI is a (non-perfect) proxy for welfare.

Sustainability-oriented EU Taxes: The CCCTB - Danuše Nerudová CCCTB is targeted at reducing compliance costs and increasing transparency and enables fair tax competition via tax rates. Supporting sustainable and inclusive growth through tax policy requires a smart tax mix as well as having an efficient design for each tax. Such a design is discussed in the paper. However, the tax structure matters as well. The paper might benefit from additional analysis which compares the current CIT base with the proposed CCCTB base and the corresponding changes of the tax rates to compensate for changes in revenue (assumption: budget neutrality).