Bridging The CCCTB And The Arm’s Length Principle – A Value Chain Analysis Approach

; posted on
November 8th, 2017

This article provides an analysis of the proposals for a common consolidated tax base (CCTB) and common consolidated corporate tax base (CCCTB) in the European Union in the context of transfer pricing, concluding that a value chain analysis approach is the only possible means of aligning the CCCTB rules with the arm’s length principle.

1. Introduction

1.1 Introductory remarks
Formulary apportionment models of taxation have often been proposed as a means to resolve current tax planning leakages and conflicting positions regarding the interpretation of tax treaties. The emblematic example of formulary apportionment, often referred to as “unitary taxation”, practised amongst jurisdictions such as the United States and Canada, has provided the inspiration for the creation of a peculiar EU variety of formulary apportionment.

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Source: TPA Global - Steef Huibregtse, Louan Verdoner, Jakub Michalak and IBFD - Rene Offermans.

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