Accounting and Taxation in the light of the new EU strategy (after IAS/IFRS)

The connection between tax and accounting is a complex and central topic within the taxation of companies area. Over the past few years, the topic has taken on a dynamic dimension, due to the fact that the European Union made important changes to financial accounting. Even though our analysis will concern the specific tax aspect of the determination of the companies’ tax base, it is important to bear in mind that accounting is, historically, a starting point for taxation of companies. So that, it is obvious that there are fiscal effects whenever accounting changes.
In this context, starting from 2002 (after European Regulation 1606/2002), the most important change has been the introduction of International Financial Reporting Standards (IFRS) as the mandatory standards for consolidated accounts in listed companies within the EU, but the introduction of IFRS also affected financial accounting for unlisted companies and within the financial statement.
In this direction, the EU also approved Directive 2003/51 with the main objective of harmonizing the accounting rules applying to companies and other bodies not subject to the European Parliament and EC Council Regulation 1606/2002 on the application of international accounting standards to listed companies. It could thus remove any discrepancy between the accounting directives and the Regulation on the application of international accounting standards (IFRS), since it makes it possible to apply the IFRS accounting options to companies that retain the accounting directives as their basic legislation.
EC Directive 2003/51 has been implemented in different ways in EU countries.
In some cases, the differences are due to fiscal reasons.
After the global economic (financial) crisis, the EU commission rethought the accounting policy and on 26 June 2013, approved new accounting Directive 2013/34.
In “premise four” of the Directive, it is possible to read about the change of strategy adopted by the EU:

“Annual financial statements pursue various objectives and do not merely provide information for investors in capital markets but also give an account of past transactions and enhance corporate governance. Union accounting legislation needs to strike an appropriate balance between the interests of the addressees of financial statements and the interest of undertakings in not being unduly burdened with reporting requirements”.

So, taking into consideration the accounting implications, our research has to address the main question, i.e. the determination of the companies’ tax base in their own national legal order (theoretical aspect, main justifications of the connection, etc.).

In the background, and linked to our analysis, is the CCCTB EU directive proposal.

From a methodological point of view, the coordinator of the research prepared a general report with different kind of questions.

On this ground, answering the questions in the form of a full-text survey of the topic, each member will prepare a part of the research.

Immediately after, it will be possible, with the support of the Italian colleagues specialized in comparative tax law, to do a comparative survey.

The results of the research will be presented in Turin at the end of 2015 or at the beginning of 2016.