Proposal for an Enhanced CCTB as Alternative to a CCCTB with Formulary Apportionment
World Tax Journal, Volume 4, Issue 2, June 2012, pp. 125-150
Working Paper of the Max Planck Institute for Tax Law and Public Finance No. 2012-01
28 Pages Posted: 29 Feb 2012 Last revised: 27 May 2013
Date Written: February 28, 2012
Replacing separate accounting and arm’s length pricing by consolidation and formulary apportionment lies at the heart of the Commission’s proposal for a Common Consolidated Corporate Tax Base. This article shows that such a radical change of system is not justified as it would not solve the problems related to the arm’s length standard, but combine them with additional drawbacks of consolidation and formulary apportionment. Instead, the article pleads for an enhanced Common Corporate Tax Base without consolidation as an alternative approach for the reduction of tax obstacles to the internal market.
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