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Stijn Blaakman, Jasper Korving
Intertax
Volume 52, Issue 5 (2024) pp. 361 – 386
https://doi.org/10.54648/taxi2024038
Abstract
On 12 September 2023, the European Commission published the directive proposal ‘Business in Europe: Framework for Income Taxation’ (hereinafter ‘BEFIT Proposal’). The BEFIT Proposal should harmonize the corporate income tax bases for companies within the EU. For the calculation of the tax base, the financial accounts are taken as the starting point. Subsequently, several upward and downward adjustments are made. This methodology is close to the calculation method as accepted by the Pillar Two Directive. In this contribution, the authors will compare the calculation methods in both directives, examine the consistencies and differences between them and make suggestions for improvement. Besides that, the authors will verify whether the application of BEFIT could still result in the application of a top up tax under the Pillar Two Directive and will make suggestions to avoid potential additional levies.
Keywords
EU, harmonization, Pillar Two, OECD, BEFIT, tax base, corporate income tax, allocation, formula apportionment, CCCTB
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