Tax Spillovers under Separate Accounting and Formula Apportionment
AbstractIt is observed in the real world that taxes matter for location decisions and that multinationals shift profits by transfer pricing. The US and Canada use Formula Apportionment (FA) to tax corporate income, and the EU is debating a switch from Separate Accounting (SA) to FA. This paper develops a theoretical model that compares basic properties of FA to SA. The focal point of the analysis is on how changes in tax rates affect capital formation, input choice, and transfer pricing as well as spillovers on tax revenue in other countries. The analysis shows that a move from SA to FA will not eliminate such spillovers and will, in cases identified in the paper, actually aggravate them.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 01-07.
Date of creation:
Date of revision:
Contact details of provider:
Postal: Øster Farimagsgade 5, Building 26, DK-1353 Copenhagen K., Denmark
Phone: (+45) 3532 4411
Fax: +45 35 32 30 00
Web page: http://www.econ.ku.dk/epru/
More information through EDIRC
Other versions of this item:
- Nielsen, Soren Bo & Raimondos-Møller, Pascalis & Schjelderup, Guttorm, 2001. "Tax Spillovers under Separate accounting and Formula Apportionment," CEPR Discussion Papers 2831, C.E.P.R. Discussion Papers.
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-05-08 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Wolfgang Eggert & Andreas Haufler, 2006.
"Company-Tax Coordination cum Tax-Rate Competition in the European Union,"
FinanzArchiv: Public Finance Analysis,
Mohr Siebeck, Tübingen, vol. 62(4), pages 579-601, December.
- Eggert, Wolfgang & Haufler, Andreas, 2006. "Company tax coordination cum tax rate competition in the European Union," Discussion Papers in Economics 902, University of Munich, Department of Economics.
- Wolfgang Eggert & Andreas Haufler, 2006. "Company Tax Coordination cum Tax Rate Competition in the European Union," Ifo Working Paper Series Ifo Working Papers No. 28, Ifo Institute for Economic Research at the University of Munich.
- Rüdiger Pethig & Andreas Wagener, 2007.
"Profit tax competition and formula apportionment,"
International Tax and Public Finance,
Springer, vol. 14(6), pages 631-655, December.
- Rüdiger Pethig & Andreas Wagener, 2003. "Profit Tax Competition and Formula Apportionment," CESifo Working Paper Series 1011, CESifo Group Munich.
- Rüdiger Pethig & Andreas Wagener, 2003. "Profit Tax Competition and Formula Apportionment," Volkswirtschaftliche DiskussionsbeitrÃ¤ge 106-03, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
- Hans Jarle Kind & Helene Midelfart & Guttorm Schjelderup, 2004.
"Corporate Tax Systems, Multinational Enterprises, and Economic Integration,"
CESifo Working Paper Series
1241, CESifo Group Munich.
- Kind, Hans Jarle & Midelfart, Karen Helene & Schjelderup, Guttorm, 2005. "Corporate tax systems, multinational enterprises, and economic integration," Journal of International Economics, Elsevier, vol. 65(2), pages 507-521, March.
- Doina Maria Radulescu, 2002. "Besteuerung von Kapitalgesellschaften im Binnenmarkt - Reformvorschlag der Europäischen Kommission," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 55(02), pages 12-18, 01.
- Haufler, Andreas, 2006. "Die Besteuerung multinationaler Unternehmen," Discussion Papers in Economics 1153, University of Munich, Department of Economics.
- Thiess Buettner & Nadine Riedel & Marco Runkel, 2008.
"Strategic Consolidation under Formula Apportionment,"
CESifo Working Paper Series
2484, CESifo Group Munich.
- Thiess Buettner & Nadine Riedel & Marco Runkel, 2008. "Strategic Consolidation under Formula Apportionment," Working Papers 0827, Oxford University Centre for Business Taxation.
- Joann Weiner, 2002. "Formula Apportionment in the European Union: A Dream Come True or the EU’s Worst Nightmare?," CESifo Working Paper Series 667, CESifo Group Munich.
- Kind, Hans Jarle & Schjelderup, Guttorm & Ulltveit-Moe, Karen-Helene, 2001. "Corporate Taxation, Multinational Enterprise and Economic Integration," CEPR Discussion Papers 2753, C.E.P.R. Discussion Papers.
- Clemens Fuest, 2008.
"The European Commission´s Proposal for a Common Consolidated Corporate Tax Base,"
0823, Oxford University Centre for Business Taxation.
- Clemens Fuest, 2008. "The European Commission's proposal for a common consolidated corporate tax base," Oxford Review of Economic Policy, Oxford University Press, vol. 24(4), pages 720-739, winter.
- Doina Maria Radulescu, 2007. "From Separate Accounting to Formula Apportionment: Analysis in a Dynamic Framework," CESifo Working Paper Series 2122, CESifo Group Munich.
- Peter SÃ¸rensen, 2004. "Company Tax Reform in the European Union," International Tax and Public Finance, Springer, vol. 11(1), pages 91-115, January.
- Marcel Gérard & Joann Weiner, 2003. "Cross-Border Loss Offset and Formulary Apportionment: How do they affect multijurisdictional firm investment spending and interjurisdictional tax competition ?," CESifo Working Paper Series 1004, CESifo Group Munich.
- Charles E. Hyde, 2001. "Multinationals And The Relationship Between Strategic And Tax Transfer Prices," Department of Economics - Working Papers Series 822, The University of Melbourne.
- Joann Martens Weiner, 2005. "Formulary Apportionment and Group Taxation in the European Union: Insights from the United States and Canada," Taxation Papers 8, Directorate General Taxation and Customs Union, European Commission, revised Mar 2005.
- Christian Keuschnigg & Peter Egger & Wolfgang Eggert & Hannes Winner, 2009.
"Corporate Taxation, Debt Financing and Foreign Plant Ownership,"
University of St. Gallen Department of Economics working paper series 2009
2009-01, Department of Economics, University of St. Gallen.
- Egger, Peter & Eggert, Wolfgang & Keuschnigg, Christian & Winner, Hannes, 2010. "Corporate taxation, debt financing and foreign-plant ownership," European Economic Review, Elsevier, vol. 54(1), pages 96-107, January.
- Ana Agundez-Garcia, 2006. "The Delineation and Apportionment of an EU Consolidated Tax Base for Multi-jurisdictional Corporate Income Taxation: a Review of Issues and Options," Taxation Papers 9, Directorate General Taxation and Customs Union, European Commission, revised Oct 2006.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabine Fischer).
If references are entirely missing, you can add them using this form.