THE EUROPEAN Commission has produced proposals for a common system of working out the tax base of businesses operating in the EU.
It says the new system is designed to reduce the administrative burden on companies in the EU as they try to comply with up to 27 different national systems for determining their taxable profits.
The proposed common consolidated corporate tax base (CCCTB) would mean that companies would benefit from a single system for filing their tax returns.
It will reduce compliance costs and legal uncertainties, the EU says.
Companies would be able to consolidate all the profits and losses they incur across member states.
The EU added that member states would keep their right to set their own corporate tax rate.
Ireland has previously expressed concern about the plan, with Taoiseach Enda Kenny saying he regarded CCCTB as the "harmonisation of corporate tax rates through the back door".
Each country within the EU has a veto on the proposals.
It is expected legislation giving effect to the CCCTB will take at least two years to produce.
The Commission estimates the new proposals would save businesses €700m every year in lower compliance costs and €1.3bn through consolidation.
Firms looking to expand across borders would also benefit by up to €1bn in savings.