YEAR 2019 N.º 3

ISSN 2182-9845

Are IFRS Standards a Good Starting Point for a Corporate Tax Base? Tax Principles for a CCCTB

Antonio Lopo Martinez


Common Corporate Tax Base; IFRS; Tax Principles; Tax Accounting.


This article discusses whether IAS/IFRS should be used as a starting point in the context of the Common Corporate Tax Base in the European Union. Non-European countries may also have an interest in the analysis on the use of IFRS to compute the corporate tax base, as well. After a background discussion on the application of IAS/IFRS as the start point for a tax base, some principles of tax bases are analyzed. Additionally, the disadvantages and advantages of using IAS/IFRS as the start point are presented. In the end, the creation of an independent tax accounting framework is recommended, which should have as the primary purpose taxation, and taxpayers and governments as the users of the information. In this new arena, the IAS/IFRS should be a valuable toolbox of concepts that can be adjusted for a tax perspective.

Table of contents

1. Introduction          
2. Formal Linkage of the Corporate Tax Base to Financial Accounting    
3. Background to IAS/IFRS as a starting point to CCTB   
3.1. Different objectives of IFRS and Tax Accounting       
3.2. Different Institutional Frameworks from IAS/IFRS and Tax Accounting      
3.3. IAS/IFRS uses fair-value accounting  
3.4. Are the differences so hard to reconcile?        
4. What are the Tax Principles for a Tax Base?      
4.1. Neutrality/Efficiency
4.2. Equity/Equality  
4.3. Legal Certainty  
4.4. Simplicity/Practicability           
5. What are the Problems with IFRS?          
5.1. Lack of certainty           
5.2. Subjectivity in the valuation and recognition  
5.3. Difficulty in tax law to accompany the economic essence     
6. Critical Evaluation of Favorable Arguments for IAS/IFRS Standards  
7. Conclusions          
7.1. Use IAS/IFRS as a toolbox of concepts but not as a starting point  
7.2. Create a different, new set of accounting rules oriented to tax