Tax sharing under the Common Consolidated Corporate Tax Base: Measurement of the profit generating factors in the agriculture sector D., Krchniva K. (2016): Tax sharing under the Common Consolidated Corporate Tax Base: Measurement of the profit generating factors in the agriculture sector. Agric. Econ. – Czech, 62: 363-377.
download PDF
The allocation formula for the distribution of the Common Consolidated Corporate Tax Base (CCCTB) should be based on three macroeconomics factors which are considered to have the largest impact on profitability. The paper researches the ability of the allocation formula factors to explain variability in profit/loss generation of single enterprises from the perspective of the Czech Republic with the special focus on the explanation power of the allocation formula on profit/loss generation of companies operating in the agriculture sector (NACE A). The analysis is based on the comparison of the coefficients of determination as an indicator of the explained variability of the proposed simple as well as the multiple regression models. The paper concludes that proportion of explained profitability by the formula factors as are defined by the Draft Directive on a Common Consolidated Corporate Tax Base can differ by more than 30% with regard to the sector of economic activity classified by the NACE, whereas in the individual subsectors of the agriculture the difference may amount to 40%.
Anand Bharat N., Sensing Richard (2000): The Weighting Game: Formula Apportionment as an Instrument of Public Policy. National Tax Journal, 53, 183-200
Barry F. (2008): The Common Consolidated Corporate Tax Base DebateTrinity College Dublin, October 2008.
Bettendorf Leon, Devereux Michael P., Van Der Horst Albert, Loretz Simon, De Mooij Ruud A. (2010): Corporate tax harmonization in the EU. Economic Policy, 25, 537-590
Buettner Thiess, Riedel Nadine, Runkel Marco (2011): Strategic Consolidation Under Formula Apportionment. National Tax Journal, 64, 225-254
Cline, R, Neubig, T. et al. (2010): Study on the Economic and Budgetary Impact of the Introduction of a Common Consolidated Corporate Tax Base in the European Union. Commissioned by the Irish Department of Finance. Available at (assessed January 2015).
Cobham A., Loretz S. (2014): International distribution of the corporate tax base: Impact of different apportionment factors under unitary taxation. In: 70th Annual Congress of the International Institute of Public Finance. Lugano, Switzerland. Available at (accessed December 2014).
David P., Nerudová D. (2008): Selected problems of value added tax application in the agricultural sector of the European Union internal Market. Agricultural Economics – Czech, 54: 1–11.
Devereux Michael P., Loretz Simon (2008): The Effects of EU Formula Apportionment on Corporate Tax Revenues. Fiscal Studies, 29, 1-33
Devereux M.P., Loretz S. (2008): Increased Efficiency through Consolidation and Formula Apportionment in the European Union? Oxford University Centre for Business Taxation, WP 08/12. (June 2008).
Devine Kevin, O’Clock Priscilla, Seaton Lloyd “Pat” (2006): Estimating Impact of Formula Apportionment on Allocation of Worldwide Income and the Potential for Double Taxation. Advances in International Accounting, 19, 115-144
Eberhartinger, E., Petutschnig, M. (2014): CCCTB – The Employment Factor Game. WU International Taxation Research Paper Series, No. 2014-01. WU Vienna University of Economics and Business, Universität Wien, Vienna.
Eichlefder S., Hechtner F., Hundsdoerfer J. (2014): The impact of formula apportionment on business activity: Evidence from the German local business tax. Preliminary version, April 2014. Available at (assessed October 2014).
European Commission (2011): Proposal for A Council Directive on a Common Consolidated Corporate Tax Base (CCCTB). Brussels. Com(2011) 121/4. 2011/0058 (CNS). Available at (assessed September 2014).
European Parliament news (2012): Corporate taxation: Parliament pushes for a compulsory common base. Press release. REF: 20120418IPR43390. Available at (assessed October 2014).
Fuest C. (): The European Commission's proposal for a common consolidated corporate tax base. Oxford Review of Economic Policy, 24, 720-739
Fuest Clemens, Hemmelgarn Thomas, Ramb Fred (2007): How would the introduction of an EU-wide formula apportionment affect the distribution and size of the corporate tax base? An analysis based on German multinationals. International Tax and Public Finance, 14, 605-626
Gördör M. (2011): A common corporate tax base in order to improve European SMES business environment. Currently Juridical Journal, 40: 151–158.
Henszey B.N., Koot R.S. (1983): Is a Three Factor Formula Apportionment Fair? Tax Executive, January 1983: 141–148.
Hines J.R. Jr. (2008): Income misattribution under formula apportionment. European Economic Review, 54: 108–120.
Horst van der A. (2007): Is EU Coordination Needed for Corporate Taxation? Budget Perspectives. CPB Netherlands Bureau for ESRI, Economic Policy Analysis. October 2007.
Hrena K., Silhan P. (1986): An empirical analysis of unitary apportionment. The Journal of the American Taxation Association, 8: 7–18.
Loyens & Loeff (2012): European Parliament issues Report on the proposal for a CCCTB. Tax Advisers, Civil Law Notaries, EC Report, May 2012. Available at (assessed October 2014).
Martini J.T., Niemann R., Simons D. (2014): Management incentives under formula apportionment – Tax-induced distortions of effort and compensation in a principal-agent setting. Quantitative Research in Taxation – arqus Discussion Paper No. 168. Available at
Mintz J. (2007): Europe slowly lurches to a common consolidated corporate tax base: issues at stake. In: Lang M. et al. (eds): A Common Consolidated Corporate Tax Base for Europe. Alemanha: Springer: 128–138.
Mintz Jack, Smart Michael (2004): Income shifting, investment, and tax competition: theory and evidence from provincial taxation in Canada. Journal of Public Economics, 88, 1149-1168
McLure Ch.E. (2007): Harmonizing corporate income taxes in the European Community: Rational and implications. Tax Policy and the Economy, 22: 151–195.
McLure Ch.E. (2008): Harmonizing Corporate Income Taxes in the US and the EU: Legislative, Judical, Soft Law and Cooperative approaches. CESifo Forum 2008: 46–52.
Nerudová D., David P. (2008): VAT in the frame of providing management services of the subsidiary in the selected EU member states. Agricultural Economics – Czech, 54: 333–342.
Nerudová D., Solilová V., Bohušová H., Svoboda P. (2015): Dopady zavedení CCCTB na rozpočet České republiky. (The impact of the introduction of the CCCTB on the state budger of the Czech Republic.)Wolters Kluwer, Praha.
Oestreicher A., Spengel CH. (2007): Tax Harmonization in Europe: The Determination of Corporate Taxable Income in the EU Member States. ZEW. Available at
Petutschnig Matthias (): Common Consolidated Corporate Tax Base: Effects of Formulary Apportionment on Corporate Group Entities. SSRN Electronic Journal, , -
Roggeman A., Verleyen I.,Van Cauwenberge P., Coppens C. (2012): An empirical investigation into the design of an EU apportionment formula related to profit generating factors. Transformations in Business & Economics, 11: 36–56.
Runkel M., Schjelderup G. (2007): The choice of apportionment factors under formula apportionment. CESifo working paper, No. 2072, CESifo Group Munich. Available at: (assessed September 2014).
Shackelford D., Slemrod J. (1998): The revenue consequences of using formula apportionment to calculate U.S. and foreign-source income: a firm-level analysis. International Tax and Public Finance, 5: 41–59. 
Trandafir A. (2011): Common Consolidated Corporate Tax Base, a new measure to remove tax competition distortions in the EU. Economy Transdisciplinary Cognition, 14: 310–317.
Wiener J.M. (2005): Formulary Apportionment and Group Taxation in the European Union: Insights from the United States and Canada. Taxation Papers, WP No. 8, March 2005.
download PDF

© 2020 Czech Academy of Agricultural Sciences