Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/5.3.5.1
5.3.5.1 Introduction
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS659512:1
- Vakgebied(en)
Omzetbelasting / Plaats van levering en dienst
Voetnoten
Voetnoten
C.E. McLure, Jr. & J.M. Weiner, ‘Deciding whether the European Union should adopt formula apportionment of company income’, par. 1.3.2, in S. Cnossen, (ed.), Taxing Capital Income in the European Union, Oxford: Oxford University Press 2000.
A. Ting, The taxation of corporate groups under the enterprise doctrine: a comparative study of eight consolidation regimes (PhD Doctorate), Sydney: University of Sydney 2011, par. C.2.3.4.
A. Ting, The Taxation of Corporate Groups under Consolidation: An International Comparison, Cambridge: Cambridge University Press2013, par. 3.4.
C.E. McLure, Jr. & J.M. Weiner, ‘Deciding whether the European Union should adopt formula apportionment of company income’, par. 1.3.2, in S. Cnossen, (ed.), Taxing Capital Income in the European Union, Oxford: Oxford University Press 2000.
The most far-reaching enterprise approach is the worldwide approach. Under this approach all jurisdictions or states are taken into account. To calculate the profits subject to tax, the income and factors of both domestic and foreign entities (parents, subsidiaries as well as sister companies) that are part of the unitary group are combined.1 This represents an application of the enterprise approach: the entire group is seen as a single taxable enterprise.2 An example is the unitary taxation regime as adopted in California and other states in the United States in the 1980s.3 The idea behind this system was that, even if foreign affiliates have no activities, as they are part of the unitary business, they should be included in the combined report of the resident entity to be able to accurately measure the income of that entity.4
In this section, formulary apportionment as applied in the United States is described on a general level. Subsequently, the focus is on the former Californian system. Apart from that, the positive and negative aspects of the system as applied in the United States are listed. Additionally, the concurrence of the system with tax treaties is elaborated upon.