BEFIT - Formulary Apportionment in the European Union

Markéta Mlčúchová

No 2023-86, MENDELU Working Papers in Business and Economics from Mendel University in Brno, Faculty of Business and Economics

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.

Keywords: Formulary Apportionment; BEFIT; Separate Accounting; EU corporate taxation (search for similar items in EconPapers)
JEL-codes: F23 H25 K34 (search for similar items in EconPapers)
Pages: 19
Date: 2023-03
New Economics Papers: this item is included in nep-acc, nep-eec and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:men:wpaper:86_2023

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