EU approach in determining the corporate tax base of multinational companies and its effects on Turkey

Multinational Enterprises (MNEs) are at the center of international taxation issues. One dimension of the taxation problem of MNEs is related to the fact that these institutions do not fully pay the tax they are required to pay and that the tax share of the countries in which they operate cannot be determined and collected fairly. The other dimension is related to the elimination of double taxation problems, reduction of compliance costs, improvement of investment and business environment. In this context, the harmonization of corporate tax throughout the union has been discussed since the founding years of the European Union (EU). Since the beginning of the 2000s, the common corporate tax base has been on the agenda and the consolidated corporate tax base directive draft has been published in 2011. Then, two-stage directive drafts (common corporate tax base-CCTB and common consolidated corporate tax base-CCCTB) were prepared in 2016. In our thesis, after examining the MNEs phenomenon in the context of tax and examining the past and present course of corporate tax harmonization efforts in the EU, the final draft of the CCTB was compared with the Turkish legislation, and similar and differing regulations were examined. Possible changes in the corporate tax base in terms of financing expenses, R&D expenses, depreciation and allowance for growth and investment in the event of the implementation of the draft directive have been revealed as a result of an empirical research on the companies whose financial statements have been published. The draft subject to the research was not approved by the council until the spring of 2021, as the approval of all member states could not be obtained. In May 2021, a new action plan (BEFIT) was prepared by the EU Commission and it was announced that a new directive draft would be prepared in line with the Pillar 1 and Pillar 2 Action Plans in the Organization for Economic Cooperation and Development (OECD) instead of the existing directive drafts. Therefore, in this study, it is also discussed whether the steps on the harmonization path with the BEFIT action plan can result in a common corporate tax base.