The Apportionment Formula under the European Proposal for a Common Consolidated Corporate Tax Base

Abstract

In this article, the author discusses the sharing mechanism suggested in the Common Consolidated Corporate Tax Base proposal, which employs three equally-weighted factors: assets, labour and sales. The author argues that although there is no doubt that the transfer pricing regime should be replaced by a more effective system, designing an adequate method requires taking into consideration the unique characteristics of the European Union and the experience with formulary apportionment in other states.