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Tax sharing under the Common Consolidated Corporate Tax Base: Measurement of the profit generating factors in the agriculture sector

Author

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  • Danuse NERUDOVA

    (Department of Accounting and Taxation, Faculty of Business and Economics, Mendel University in Brno, Brno, Czech Republic)

  • Katerina KRCHNIVA

    (Department of Accounting and Taxation, Faculty of Business and Economics, Mendel University in Brno, Brno, Czech Republic)

Abstract

The allocation formula for the distribution of the Common Consolidated Corporate Tax Base (CCCTB) should be based on three macroeconomics factors which are considered to have the largest impact on profitability. The paper researches the ability of the allocation formula factors to explain variability in profit/loss generation of single enterprises from the perspective of the Czech Republic with the special focus on the explanation power of the allocation formula on profit/loss generation of companies operating in the agriculture sector (NACE A). The analysis is based on the comparison of the coefficients of determination as an indicator of the explained variability of the proposed simple as well as the multiple regression models. The paper concludes that proportion of explained profitability by the formula factors as are defined by the Draft Directive on a Common Consolidated Corporate Tax Base can differ by more than 30% with regard to the sector of economic activity classified by the NACE, whereas in the individual subsectors of the agriculture the difference may amount to 40%.

Suggested Citation

  • Danuse NERUDOVA & Katerina KRCHNIVA, 2016. "Tax sharing under the Common Consolidated Corporate Tax Base: Measurement of the profit generating factors in the agriculture sector," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 62(8), pages 363-377.
    • Handle: RePEc:caa:jnlage:v:62:y:2016:i:8:id:222-2015-agricecon
    DOI: 10.17221/222/2015-AGRICECON
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    References listed on IDEAS

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