Einde inhoudsopgave
Treaty Application for Companies in a Group (FM nr. 178) 2022/5.3.3.1
5.3.3.1 Introduction
L.C. van Hulten, datum 06-07-2022
- Datum
06-07-2022
- Auteur
L.C. van Hulten
- JCDI
JCDI:ADS659365:1
- Vakgebied(en)
Omzetbelasting / Plaats van levering en dienst
Voetnoten
Voetnoten
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. 11.5.1.
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. 3.4. Most states in the United States also apply a water’s edge system.
Other countries that apply some form of a formulary apportionment system are Argentina, Germany and Switzerland (E.D. Siu, M.I. Nalukwago, R. Surahmat & M.A.P. Valadão, ‘Unitary Taxation in Federal and Regional Integrated Markets’, ICTD Research Report 2014, no. 3 and S. Mayer, Formulary Apportionment for the Internal Market, Amsterdam: IBFD 2009, par. 3.4 and 3.5). Argentina and Switzerland, similar to the Canadian approach, do not extend consolidation beyond the legal entity. The German system applies to trade tax apportionment. These systems are not discussed in this chapter, as it would not contribute to answering the research question. The regime as applied in the United States is discussed in par. 5.3.5.
Tax base consolidation can take place under a water’s edge or under a worldwide approach. Under a water’s edge approach solely profits of group members of certain jurisdictions or states are consolidated to determine the tax base. The regime basically reallocates the same tax base to participating jurisdictions or states.1 The provinces in Canada apply a water’s edge formulary apportionment system.2 This section discusses water’s edge formulary apportionment. In this regard, as an example the system as applied in Canada is elaborated upon,3 including the pros and cons of the system. Moreover, its concurrence with tax treaties is discussed.