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Company Tax Reform in the European Union

Guidance from the United States and Canada on Implementing Formulary Apportionment in the EU

Authors: Martens-Weiner, Joann

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About this book

Even though multinational companies doing business across the European Union generally operate at the EU level, they must still compute a separate company tax base for each Member State where they do business. This process creates enormous compliance burdens as integrated multinational enterprises struggle to find appropriate "arm’s length" prices for their internal transfers of goods, services and intangibles. This process fails to tax EU companies in a manner consistent with how they do business in the European Union. By contrast to this system of separate acounting with arm’s length pricing, consolidated base taxation with formulary apportionment is an ideal system to apply to tax multinational enterprises in the European Union.

Company Tax Reform in the European Union. Guidance from the United States and Canada on Implementing Formulary Apportionment in the EU draws from experiences in the U.S. states and Canadian provinces to provide guidance to the European Union. The book describes the new landscape for company tax reform in the EU and how formulary apportionment fits into that landscape. It discusses practical issues concerning the fundamental elements of a formulary apportionment system and evaluates technical issues concerning how formulary apportionment may affect investment, employment, tax planning, and tax competition in the European Union. The book emphasizes that formulary apportionment preserves EU Member State tax sovereignty and allows them to remain competitive in the drive to stimulate new investment and employment.

"Dr. Martens-Weiner's book draws on the U.S. and Canadian experience in using formulary apportionment to achieve a reasonable allocation of income across fiscal borders. The lessons she draws should inform the EU debate over formulary apportionment."

Emil M. Sunley, Assistant Director

Fiscal Affairs Department, International Monetary Fund

"Company Tax Reform in the European Union gave me new insights on the U.S. and Canadian experiences with formulary allocation of business income. Reading it will be a must for anybody who wants to take part in the forthcoming discussion of the future common consolidated corporate tax base and its formula allocation to different EU Member States."

Dr. Albert J. Rädler
Prof. em. of International Business Taxation, International Tax Institute, University of Hamburg

Senior Tax Partner, Linklaters Oppenhoff & Rädler, Munich office
Member of the Ruding Committee, Brussels 1991/1992

"An important volume that will prove valuable as the European Union decides whether -- and how -- to harmonize company income taxes."

Charles E. McLure, Jr.

Hoover Institution, Stanford University

"This book is important reading for both tax policymakers and business leaders. It breaks the mold of conventional thinking by demonstrating that formulary apportionment is a practical way to solve the income-allocation problems confronting the European Union. Equally important, the book gives the advocates of arm’s-length allocation methods some challenging food for thought."

Thomas F. Field

Founder, Tax Analysts

Joann Martens-Weiner is a renowned world expert on formulary apportionment. She has dedicated more than 15 years to the subject, beginning with her dissertation on the economic effects of the formulary apportionment system used in the United States and Canada. Dr. Martens-Weiner has a Ph.D. in economics from Harvard University and a B.S. in Business Administration from the University of California at Berkeley. She has served as an economist in the Office of Tax Analysis at the U.S. Treasury Department and as an expert on formulary apportionment for the Directorate-General for Taxation and Customs Union at the European Commission.

Table of contents (8 chapters)

Table of contents (8 chapters)
  • Company Tax Reform and Formulary Apportionment in the European Union

    Pages 1-15

  • The Landscape for EU Company Tax Reform

    Pages 17-31

  • Formulary Apportionment in the European Union

    Pages 33-45

  • The Apportionment Formula

    Pages 47-59

  • Nexus, The Tax Base and the Taxable Unit

    Pages 61-75

Buy this book

eBook n/a
  • ISBN 978-0-387-29487-2
  • Digitally watermarked, DRM-free
  • Included format: PDF
  • ebooks can be used on all reading devices
Hardcover n/a
  • ISBN 978-0-387-29424-7
  • Free shipping for individuals worldwide
Softcover n/a
  • ISBN 978-1-4419-3990-6
  • Free shipping for individuals worldwide
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Bibliographic Information

Bibliographic Information
Book Title
Company Tax Reform in the European Union
Book Subtitle
Guidance from the United States and Canada on Implementing Formulary Apportionment in the EU
Authors
Copyright
2006
Publisher
Springer US
Copyright Holder
Springer-Verlag US
eBook ISBN
978-0-387-29487-2
DOI
10.1007/0-387-29487-2
Hardcover ISBN
978-0-387-29424-7
Softcover ISBN
978-1-4419-3990-6
Edition Number
1
Number of Pages
XVII, 122
Topics