Abstract

http://ssrn.com/abstract=1693105
 
 

Footnotes (41)



 


 



Formulary Apportionment: Myths and Prospects - Promoting Better International Tax Policy and Utilizing the Misunderstood and Under-Theorized Formulary Alternative


Reuven S. Avi-Yonah


University of Michigan Law School

Ilan Benshalom


Hebrew University of Jerusalem - Faculty of Law

October 16, 2010

U of Michigan Law & Econ, Empirical Legal Studies Center Paper No. 10-029
U of Michigan Public Law Working Paper No. 221

Abstract:     
This paper seeks to re-examine the formulary alternative to transfer pricing by inquiring whether partial integration of formulary concepts into current practices would offer a reasonable alternative to transfer pricing rules. We believe that the key to achieving an equitable and efficient allocation of MNE income is to solve the problem of the residual, i.e., how to allocate income generated from mobile assets and activities whose risks are born collectively by the entire MNE group. These assets and activities generate most of the current transfer pricing compliance and administrative costs, as well as tax avoidance opportunities. A limited formulary tax regime that allocates only the residual portion of MNE income may therefore offer significant advantages. Furthermore, such a regime would not require significant deviations from current practices, or substantial modifications of the international tax regime.

Number of Pages in PDF File: 30

Keywords: Transfer Pricing, Arm's Length Standard, Formulary Apportionment

JEL Classification: H25, H26

working papers series





Download This Paper

Date posted: October 16, 2010 ; Last revised: November 18, 2010

Suggested Citation

Avi-Yonah, Reuven S. and Benshalom, Ilan, Formulary Apportionment: Myths and Prospects - Promoting Better International Tax Policy and Utilizing the Misunderstood and Under-Theorized Formulary Alternative (October 16, 2010). U of Michigan Law & Econ, Empirical Legal Studies Center Paper No. 10-029; U of Michigan Public Law Working Paper No. 221. Available at SSRN: http://ssrn.com/abstract=1693105 or http://dx.doi.org/10.2139/ssrn.1693105

Contact Information

Reuven S. Avi-Yonah (Contact Author)
University of Michigan Law School ( email )
625 South State Street
Ann Arbor, MI 48109-1215
United States
734-647-4033 (Phone)
Ilan Benshalom
Hebrew University of Jerusalem - Faculty of Law ( email )
Mount Scopus, 91905
Israel
Feedback to SSRN


Paper statistics
Abstract Views: 3,625
Downloads: 649
Download Rank: 22,028
Footnotes:  41

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo8 in 0.281 seconds