Mr. Pascal Saint-Amans:

The current rules under Article 9 of the OECD and UN model tax conventions provide for international transactions within a group to be priced at arm's length, which means as if the transactions had been concluded with independent parties.

As a result, the countries should tax the profit accruing in their jurisdictions - in other words, the value creation that Deputy Donnelly referred to.

It is my understanding that the CCCTB proposal is about establishing a consolidated common base for corporate income tax with a number of criteria to allocate the right to tax. Deputy Donnelly's description is right, but I am not sure I would have reached the same conclusion. It all depends on the selection of the criteria. Perhaps the criteria will be defined to ensure that taxation takes place where profits accrue and where value is created. There are interesting and fascinating debates among OECD members, and also among non-OECD members such as India and Chine, on what value creation means. Not long ago, a Chinese delegate publicly indicated that when a German-manufactured car is sold in China, the value creation is in China where the sale takes place. Therefore, it is a Chinese citizen that gives the value, because he or she has bought the car. As the committee will know, there are many different interpretations. Clearly, the Chinese case that I described is not the consensus.

Deputy Donnelly reached the conclusion that there is a contradiction. I would not reach the same conclusion, because there may be another way to approach the matter. What is for sure - this is my comment on the CCCTB - is that it would require a consensus on the criteria to share the profits, and I do not see that happening outside the European Union for a while. A number of people on the NGO side are asking for unified taxation. I am sorry, but I do not see that happening. I am not even sure I am sorry because I am not sure it would be better. However, I am more than happy to examine and consider the matter. I do not see it happening because there is no consensus on criteria and consensus is not possible in the short, medium and, probably, long-term. I have sympathy for my colleagues in the European Commission who are pushing the initiative, because it does not seem to have consensus either.