The European Parliament,

-   having regard to the Commission non-papers 'A Common Consolidated EU Corporate Tax Base' and 'Home State Taxation for Small and Medium-Sized Enterprises', issued on 7 July 2004 and presented to the informal Ecofin Council of 10 and 11 September 2004,

-   having regard to the informal Ecofin Council of 10 and 11 September 2004 in Scheveningen,

-   having regard to the communication from the Commission to the Council, the European Parliament and the Economic and Social Committee: 'Towards an Internal Market without tax obstacles. A strategy for providing companies with a consolidated corporate tax base for their EU-wide activities' (COM(2001)0582) ,

-   having regard to communication from the Commission to the Council, the European Parliament and the Economic and Social Committee: 'An Internal Market without company tax obstacles: achievements, ongoing initiatives and remaining challenges' (COM(2003)0726) ,

-   having regard to the communication of 2 February 2005 from Commission President Barroso, in agreement with Vice-President Verheugen, to the Spring European Council: 'Working together for growth and jobs, A new start for the Lisbon Strategy' (COM(2005)0024),

-   having regard to having regard to the communication of 12 April 2005 from Commission President Barroso, in agreement with vice-President Verheugen and Commissioners Almunia and Spidla , on Integrated Guidelines for Growth and Jobs (2005-2008), including a Commission recommendation on the broad guidelines for the economic policies of the Member States and the Community and a proposal for a Council decision on guidelines for the employment policies of the Member States (COM(2005)0141 - 2005/0057(CNS)),

-   having regard to its resolution of 14 March 2002 on the Commission communication to the Council, the European Parliament and the Economic and Social Committee on tax policy in the European Union(1),

-   having regard to its position of 16 December 2003 on the proposal for a Council directive amending Directive 90/435/EEC on the common system of taxation applicable in the case of parent companies and subsidiaries of different Member States(2),

-   having regard to its position of 10 March 2004 on the proposal for a Council directive amending Directive 90/434/EEC of 23 July 1990 on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States(3),

-   having regard to Council Regulation (EC) No 2157/2001 of 8 October 2001 on the Statute for a European Company (SE)(4),

-   having regard to Council Directive 2001/86/EC of 8 October 2001 complementing the Statute for a European Company with regard to the involvement of employees(5),

-   having regard to the study on an analysis of potential competition and discrimination issues relating to a pilot project for an EU tax consolidation scheme for the European Company Statute by the Deloitte EU Tax Group of 18 August 2004 (Taxud/2003/DE/305),

-   having regard to the Commission's European Tax Survey of 10 September 2004(6),

-   having regard to the study 'Effects of the proposed Directive on Services in the Internal Market on Tax Collection and Tax Revenue in the EU Member States', a research study by the Austrian Institute of Economics commissioned by the European Parliament's Directorate-General for Internal Policies of the Union, Directorate A – Economic and Scientific Policy (Project No IP/A/ECON/ST/2004-33),

-   having regard to Rule 45 of its Rules of Procedure,

-   having regard to the report of the Committee on Economic and Monetary Affairs (A6-0386/2005),

A.   whereas the Treaty establishing the European Community provides in Article 94 for the approximation of laws, regulations and administrative provisions of the Member States which affect the functioning of the internal market,

B.   whereas, at the Spring European Council in March 2005, the European Union laid down the fundamental lines for the re-launch of the Lisbon Strategy, based on knowledge, competitiveness, growth and employment,

C.   whereas the removal of any obstacles which hamper the proper functioning of the internal market in the bases of company taxation is an important element in the competitiveness of European enterprises, according to the new 'integrated guidelines',

D.   whereas phenomena such as economic integration, restructuring, cross-border mergers and increased international competition make it necessary to overcome any tax obstacles which impede the completion of the internal market and economic growth,

E.   whereas the continuing existence of differing bases for company tax systems produces obstacles to companies' cross-border activities, with administrative and economic inefficiencies ,

F.   whereas the existence of 25 different tax systems entails not only costs and inefficiencies for European companies which have cross-border activities but also losses for the Member States, owing to fraud, transfer pricing for tax purposes and tax evasion, as well as a number of problems relating to tax law,

G.   whereas factors giving rise to distortions of competition must be countered and whereas a properly functioning internal market must create the conditions for enterprises to enjoy a level playing field,

H.   whereas the issue of company taxation within the internal market is also important in legal terms, as is shown by the increasing number of legal disputes and proceedings in this field, whereas the judgments of the Court of Justice of the European Communities concerning the Member States' arrangements with regard to company taxation have always reaffirmed the prohibition on discrimination and restriction and whereas it is necessary to address the legal uncertainties arising from the fact that the common consolidated corporate tax base (CCCTB) (as possibly adopted in the future in the framework of enhanced cooperation) could apply to companies and branches established in countries which do not wish to adopt the CCCTB,

I.   whereas the approach adopted by the Commission regarding the introduction of a common consolidated corporate tax base is utterly balanced, provides the most appropriate solution for large companies, and must be treated as the priority measure to be implemented at European level in the area of company taxation; whereas the home State taxation option for SMEs could constitute a form of simplification for entrepreneurs, provided that the Member States conclude the necessary bilateral or multilateral conventions,

J.   whereas the purpose of the common consolidated corporate tax base should be to create a common tax base at European level for companies that have cross-border activities and are established in at least two Member States, which will be more efficient, transparent and conducive to investment in the context of an effective single European Market,

K.   whereas the Commission proposal for a pilot project based on the system of home State taxation could be a realistic and effective instrument for reducing compliance costs and removing the fiscal and administrative obstacles affecting the activities of SMEs in areas with comparable levels of effective taxation in the respective Member States, and whereas such a system introduces substantial simplification, whereby the owner of a small or medium-sized enterprise is required to know and apply only national tax rules in order to be able to operate throughout the internal market,

L.   whereas the creation of a common consolidated tax base can be of no value if it is not efficient, transparent and competitive,

1.  Notes that European companies operating in the internal market are hampered by tax obstacles, problems of double taxation and high compliance costs when they invest or operate in another Member State;

2.  Points out that the obstacles created by very divergent national bases of company taxation applying to enterprises which have cross-border activities in the European Union have a negative effect on economic growth and corporate competitiveness in both the internal market and the international market;

3.  Reiterates that closer cooperation between the Member States is needed with regard to the bases of company taxation, in order to remove the tax obstacles linked to specific issues such as:

4.  Affirms the need for reform of the bases of company tax for companies operating in the internal market, in furtherance of the new Lisbon Strategy, so as to ensure equal treatment for enterprises, administrative simplification and cost reduction and to promote greater investment, corporate competitiveness, growth and job creation;

5.  Welcomes the Commission's new proposals concerning the introduction of a common consolidated corporate tax base at European level for large companies and the experimental and considered introduction of the system of home State taxation for SMEs, and notes the creation of the CCCTB Working Group;

6.  Regrets that some Member States still reject the need for greater cooperation on tax matters, in particular with regard to the tax bases applicable to companies, bearing in mind the fact that coordination between the Member States with regard to company taxation is one of the instruments laid down in the 'integrated guidelines';

A common consolidated corporate tax base at European level

7.  Stresses the importance of adopting a common consolidated tax base which will fulfil the requirement of greater integration in the internal market; supports the Commission proposal and is convinced that the introduction of a common consolidated tax base for companies established in at least two Member States - a base which will make it possible to determine the taxable revenue according to a set of common rules defined at European level and applicable to an individual group of companies - is the best way of tackling effectively the tax obstacles hampering companies' cross-border activities;

8.  Reaffirms that the introduction of a common consolidated corporate tax base will not in any way prejudice the fundamental prerogatives of the Member States regarding tax matters, and in particular their right to set the rates of national corporation tax; believes, however, that harmonisation of the corporate tax base will create the conditions for more transparent public and fiscal policies and enable capital to be put to the best possible use, thereby helping to attain the Lisbon goals;

9.  Reiterates that the objectives of the creation of a common consolidated corporate tax base at European Union level are:

10.  Believes that the best way of ensuring the creation of a common consolidated corporate tax base at European level is to define a framework of common standards via a regulation based on two key, complementary elements: the creation of a common tax base in accordance with European rules and the development of a method of consolidation, as well as a method of tax base apportionment among the Member States concerned, which will allow companies to offset and consolidate profits and losses globally throughout the European Union;

11.  Considers that the objective of introducing a CCCTB at European level could also be achieved through the mechanism of enhanced cooperation if Member States are unable to reach unanimous agreement; underlines that the mechanism of enhanced cooperation - though representing a second-best option compared to the unanimous agreement of Member States - will, at the same time, allow the great majority of European countries to progress in the field of a common framework for company taxation in the internal market while affording the other Member States the possibility of joining in at a later stage;

12.  Advocates a step-by-step approach, with the initial introduction of an optional common consolidated tax base - which will leave enterprises the choice between existing national tax bases and a European tax base - followed by an assessment in the medium term to examine the advisability of moving to a compulsory common consolidated tax base;

13.  Considers that legislation by the European Union to introduce a common consolidated tax base must at least lay down:

14.  Urges the Member States to step up their cooperation on tax matters, and acknowledges the importance of the goal of providing adequate safeguards for the legitimate financial interests of the Member States, and in particular the capacity to collect tax revenue, by means of an equitable, transparent, proportionate and accepted apportionment mechanism;

15.  Asks the Commission to assess at a later stage, and after an analysis of the consequences, the advisability of applying tax arrangements based on a common consolidated tax base to the Statute for a European Company;

The system of home State taxation for SMEs

16.  Notes that SMEs are not succeeding in taking full advantage of the internal market, and that their potential for growth, in terms of markets, cross-border activities and the capacity to establish themselves in other Member States, falls foul of obstacles arising from administrative complexity and the high costs of compliance with the different national tax systems, which have proportionately a far greater impact on SMEs than on large companies;

17.  Considers that the system of home State taxation could, subject to the conclusion of bilateral or multilateral agreements among Member States dealing with all technical issues and establishing a mechanism for sharing the tax revenue among the different national tax administrations involved in order to avoid harmful tax competition, constitute a considerable simplification for the cross-border activities of SMEs; supports the Commission proposal for a pilot project based on this system, which will make it possible for SMEs to calculate the taxable revenue of the parent company and of all the branches and subsidiaries established in other Member States participating in the project by applying the tax rules in force in their home States;

18.  Points out that, in the new Lisbon Strategy and in the framework programme for innovation and competitiveness (2007-2013), support for SMEs is a priority objective, and is convinced that the pilot project can have a positive effect on the survival rate of SMEs and on their competitiveness at European and international level;

19.  Deplores the fact that the Member States are not showing the requisite interest in and commitment to getting rid of tax obstacles which hamper the activities of SMEs, and that they are making no effort to implement the pilot project proposed by the Commission; urges the Member States, and in particular those with economically integrated cross-border regions, to join the pilot project and thus supply worthwhile, reproducible experience;

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20.  Instructs its President to forward this resolution to the Council and the Commission.

(1) OJ C 47 E, 27.2.2003, p. 591. (2) OJ C 91 E, 15.4.2004, p. 84. (3) OJ C 102 E, 28.4.2004, p. 569. (4) OJ L 294, 10.11.2001, p. 1. (5) OJ L 294, 10.11.2001, p. 22. (6) European Tax Survey, Working Paper No 3/2004.