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Common consolidated corporate tax base. Effects of formulary apportionment on corporate group entities.

Petutschnig, Matthias (2010) Common consolidated corporate tax base. Effects of formulary apportionment on corporate group entities. Discussion Papers SFB International Tax Coordination, 38. SFB International Tax Coordination, WU Vienna University of Economics and Business, Vienna.

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Abstract

The European Commission is currently working on a legislative draft to harmonise the corporate income tax provisions for multinational groups of companies throughout the European Union. For that purpose the European Commission has installed a working group with the mission to draft a Common Consolidated Corporate Tax Base (CCCTB) applicable for multinational companies. As the EU member states are not willing to surrender their taxing power to the supranational level of the EU each group entity's tax base would be determined by apportionment of the group's overall taxable income according to a predefined micro-economic factor based formula whereas the group income will be calculated by consolidating earnings beforehand separately determined by each group entity (preconsolidation income). The situs state of the particular group entity would then apply its statutory corporate tax rate on the apportioned tax base. This paper evaluates the effects of this prospective apportionment procedure on any given corporate group entity and finds that the share of the group's income allocated to a particular entity using the apportionment formula does regularly not equal the pre-consolidation income of the respective group entity. The reasons for this regular observable deviation can be found on the one hand in the concept of the apportionment formula and on the other hand in the specifics of the definitions of the apportionment factors. (author's abstract)

Item Type: Paper
Keywords: CCCTB / formulary apportionment / group taxation / Körperschaftssteuer / Besteuerungsgrundlage
Classification Codes: RVK PP 8330
Divisions: Departments > Finance, Accounting and Statistics > Inst. Revision,Treuhand & Rechnungswesen > Betriebswirtschaftliche Steuerlehre
Departments > Volkswirtschaft
Departments > Öffentliches Recht und Steuerrecht > Österr. und Internat. Steuerrecht
Depositing User: Repository Administrator
Date Deposited: 09 Jun 2010 11:53
Last Modified: 18 Aug 2011 16:08
WU Online Catalog: http://onlinekatalog.wu.ac.at/F?func=find-b&reques...
URI: http://epub.wu.ac.at/id/eprint/428

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