The effects of EU formula apportionment on corporate tax revenues

Devereux, Michael and Loretz, Simon (2008) The effects of EU formula apportionment on corporate tax revenues. Fiscal Studies, 29 (1). pp. 1-33.

Abstract

The European Commission proposes to replace the current system of taxing corporate income using separate accounting by a two-step 'consolidation and apportionment' procedure. This paper uses a large set of unconsolidated firm-level data to assess the likely impact on corporate tax revenues in each member state. Taking pre-tax profit as given, overall tax revenues would be likely to drop by 2.5 per cent if companies could choose whether to participate. By contrast, if they were forced to participate, total tax revenues would be likely to increase by more than 2 per cent, leaving some European countries - most notably, Spain, Sweden and the UK - better off. We investigate how sensitive these results are to the apportionment factors used.

Item Type: Article
Keywords: Impact analysis, corporate income tax, European Union, Taxation
Subject(s): Taxation
Centre: Oxford University Centre for Business Taxation
Date Deposited: 21 Jul 2010 10:02
Last Modified: 23 Oct 2015 14:05
URI: http://eureka.sbs.ox.ac.uk/id/eprint/340

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