European Union regulators renewed a push to create a common base for calculating taxable corporate profits with draft legislation that threatens to isolate Ireland politically as the U.K. prepares to quit the bloc. The European Commission proposed a single method for multinational companies to calculate income to avoid the cost of complying with different rules in each EU country where they file a return. Tax rates would remain in national hands under the draft law on a Common Consolidated Corporate Tax Base, or CCCTB, which the commission said could cut companies’ compliance costs by 2.5 percent. An earlier CCCTB proposal from 2011 failed to muster the unanimity needed among EU governments largely because of opposition by the U.K. and Ireland, which have opposed a common European tax base for fear it would open the door to a harmonization of rates that both nations say must remain their sovereign right to decide. With Britain preparing to leave the 28-nation EU, the fresh proposal risks leaving Ireland on its own when national governments restart deliberations on the details. “With the rebooted CCCTB proposal, we’re addressing the concerns of both businesses and citizens in one fell swoop,” European Economic Affairs Commissioner Pierre Moscovici said in an e-mailed statement on Tuesday in Strasbourg, France. “Companies need simpler tax rules within the EU. At the same time, we need to drive forward our fight against tax avoidance.” Traditionally contentious because they impinge on national powers and often futile because they require unanimous EU government support, European tax initiatives may get a boost from the U.K.’s vote in a June referendum to leave the bloc. For Britain in particular, European tax plans over the years have been deeply unwelcome because they are politically toxic domestically. The commission, the EU’s regulatory arm, denies the CCCTB would be a first step toward harmonized rates in the the bloc, arguing the goal is less red tape and more transparency. The focus on transparency, particularly the CCCTB’s role in fighting tax avoidance, risks isolating Ireland further because the Irish government is under fire for allegedly cutting an unfair sweetheart deal with Apple Inc. In August, the commission said Ireland illegally slashed the iPhone maker’s tax bill in 2003-2014 and ordered the government in Dublin to claw back as much as 13 billion euros from the company. Reactions in the European Parliament to the new CCCTB push highlight the political constraints on national governments facing a populist backlash against multinational corporations and globalization. While EU governments are responsible for deciding on the draft tax rules, the Strasbourg-based European assembly must be consulted on them. Tax Avoidance “The first, indispensable and most important thing to do if you want to tackle the problem of corporate tax avoidance is to harmonize the tax base,” Burkhard Balz, a German member of the EU Parliament’s Christian Democrats, said in an e-mailed statement. “States that oppose these new rules want to base their economies on taking bread out of the mouths of others.” The latest CCCTB proposal differs from the 2011 plan in two main ways. First, whereas the system under the previous plan would have been optional, the current draft rules would make the CCCTB mandatory for companies with global sales of more than 750 million euros a year. This reflects a heightened political push to crack down on tax avoidance. Second, the new proposal creates a two-step approach in which initial agreement will be sought on the “common base” and an accord on the “consolidation” elements would follow. This stems from the political sensitivity of consolidation, which would allow companies to file a single tax return for all their EU activities through one authority. ‘Important Improvements’ “The common base can be applied while consolidation is being negotiated and will already bring some important improvements to the EU’s corporate tax environment,” the commission said. “Nonetheless, consolidation remains a firm goal.” With consolidation, the profits and losses of the subsidiaries of a company operating in different EU nations would be added up to establish a single taxable figure that would be shared out among the countries in which the group operates using an “apportionment formula” based on assets, labor and sales. “I’m quite positive on” the CCCTB proposal, Guy Verhofstadt, a former Belgian prime minister who leads the pro-business Liberal group in the EU Parliament, told reporters in Strasbourg. “There is a growing support to have such a common policy.” In another change compared with 2011, the new CCCTB draft legislation seeks to remove a current debt bias in taxation resulting from the right of companies to deduct the interest they pay on their debts but not the costs of equity. It would do so by introducing an “Allowance for Growth and Investment” giving companies equivalent benefits for equity as they get for debt. Furthermore, the latest draft law would create an incentive for research and development by offering companies a “super-deduction” for their R&D costs.