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Uncertainty in Weighting Formulary Apportionment Factors and its Impact on After-Tax Income of Multinational Groups

Ortmann, Regina (2015) Uncertainty in Weighting Formulary Apportionment Factors and its Impact on After-Tax Income of Multinational Groups. WU International Taxation Research Paper Series, 2015-10. WU Vienna University of Economics and Business, Universität Wien, Vienna.

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Abstract

Formulary apportionment is an intensively debated mechanism for allocating tax base within multinational groups. Systems under which the formula is identical in all jurisdictions and systems under which jurisdictions can determine the weights on the formula factors individually can be observed. The latter systems produce uncertainty about the overall tax-liable share of the future group tax base. Counter-intuitively, I identify scenarios under which increased uncertainty leads to higher expected future group income. My results provide helpful insights for firms and policy makers debating the specific design of a formulary apportionment system. (author's abstract)

Item Type: Paper
Additional Information: Editors: Eva Eberhartinger, Michael Lang, Rupert Sausgruber and Martin Zagler (Vienna University of Economics and Business), and Erich Kirchler (University of Vienna)
Keywords: CCCTB / factor weights / formulary apportionment / tax uncertainty / Körperschaftssteuer / Multinationales Unternehmen / Steuerbemessungsgrundlage / Zuteilung, Schlüssel
Classification Codes: RVK QL 612, QL 830, PS 3940
Depositing User: ePub Administrator
Date Deposited: 21 Jul 2015 12:53
Last Modified: 16 Jun 2016 12:13
URI: http://epub.wu.ac.at/id/eprint/4609

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