DIRECTORATE-GENERAL TAXATION AND CUSTOMS UNION
Analyses and tax policies
Analysis and Coordination of tax policies
Brussels, 7 September 2005
Taxud E1 RD
COMMON CONSOLIDATED CORPORATE TAX
B A SE WORKI N G GROUP (CCCT B WG)
Concept of the 'tax balance sheet'
Meeting to be held on Friday 23 September 2005
Centre de Conférences Albert Borschette
Rue Froissart 36 - 1040 Brussels
B-1049 Bruxelles / B-1049 Brussel - Belgium. Office: MO59 06/017.
Telephone: (32-2) 299.11.11; direct line (32-2) 296.10.75. Fax: (32-2) 295.63.77.
Introduction and purpose of the note
In its meeting of 2 June 2005 the Group inter alia considered the definition of
depreciable assets. As in previous meetings issues concerning the link between
financial accounts and the determination of the taxable income in Member States, the
practical rules for compiling the taxable corporate income and the required supporting
documentation re-surfaced. In this context, the Commission services expressed their
preparedness to draft an explanatory note on the concept of the 'tax balance sheet'. This
concept is used for the determination of the taxable income and for the tax
documentation in some Member States but not, or at least not under this terminology,
in many others.
2) The present paper is thus intended to clarify the concept of the 'tax balance sheet' and
its distinction in comparison to the financial accounts balance sheet. It also raises the
related issue of the potential consequences of a possible move away from tax and
accounting dependency, resulting in a situation in which the financial accounts are no
longer systematically connected with the tax accounts. The intention is essentially one
of clarification and awareness-raising, not to raise a separate debate.
3) Given that the concepts of 'tax balance sheet' and 'dependency' have predominantly
been developed in Germany, the German rules