Common Consolidated Corporate Tax Base: Effects of Formulary Apportionment on Corporate Group Entities

Aktivität: VortragWissenschaftlicher Vortrag (Science-to-Science)


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.
Zeitraum19 Mai 201021 Mai 2010
EreignistitelEuropean Accounting Association - 33rd Annual Congress
VeranstaltungstypKeine Angaben