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Authors
Advisor(s)
Abstract(s)
In this paper we analyse the United States’ role as the current international tax leader, acting as an
institutional leader uncapable of pushing forward towards a new, more suitable international corporate
tax regime, due to the particularities of its international taxation system and economic preferences. After
assessing United States multinationals’ activity in the Single Market, we find evidence of artificial profit
shifting across Member States under the current method to allocate multinational enterprises’ profits.
Such actions challenge a fair international taxation in the European Union, distorting European internal
competition and hampering tax revenues collection. Although it may not be (yet) the time for a worldwide
unitary taxation approach, the analysis performed highlights the urge for the European Union to overcome
the United States political power and to unilaterally adopt the Formulary Apportionment approach,
overhauling a century-old set of global tax rules based in the separate entity approach.
Description
Keywords
Country-by-Country Reporting European Union Formulary Apportionment United States multinationals enterprises tax havens
Pedagogical Context
Citation
Vicente, Joana Andrade (2023). "Following a new tax leader : the urge to implement Formulary Apportionment in the European Union". REM Working paper series, nº 0274/2023
Publisher
ISEG - REM - Research in Economics and Mathematics