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BEFIT - Formulary Apportionment in the European Union

Author

Listed:
  • Marketa Mlcuchova

    (Department of Finance, Faculty of Business and Economics, Mendel University in Brno, Zemedelska 1, 613 00 Brno, Czech Republic)

Abstract

This paper seeks to contribute to the current debate on EU wide corporate taxation, steered by the impending BEFIT Proposal. The objective of this paper is to verify whether the inclusion of intangible assets will enhance the ability of the current proposals for Formulary Apportionment (FA) to explain variability in profitability. The research question addressed is "What is the explanatory power of the FA, for factors such as tangible assets, intangible assets, labour and sales by destination, to describe the variability in the profitability of companies active within the EU internal market?". The research reveals that the inclusion of intangible assets fails to enhance the explanatory power of the FA and that factoring in intangible assets does not appear to have a statistically significant effect in the model.

Suggested Citation

  • Marketa Mlcuchova, 2023. "BEFIT - Formulary Apportionment in the European Union," MENDELU Working Papers in Business and Economics 2023-86, Mendel University in Brno, Faculty of Business and Economics.
    • Handle: RePEc:men:wpaper:86_2023
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    References listed on IDEAS

    as
    1. Carol Corrado & Charles Hulten & Daniel Sichel, 2009. "Intangible Capital And U.S. Economic Growth," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 55(3), pages 661-685, September.
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    More about this item

    Keywords

    Formulary Apportionment; BEFIT; Separate Accounting; EU corporate taxation;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • K34 - Law and Economics - - Other Substantive Areas of Law - - - Tax Law

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