Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25905
Authors: 
Gérard, Marcel
Year of Publication: 
2006
Series/Report no.: 
CESifo working paper 1860
Abstract: 
This paper investigates replacing separate taxation by consolidation and formulary apportionment in a Bottom-up Federation, when a multijurisdictional firm is mobile in various respects. The reform is decided cooperatively by all the jurisdictions or by some of them, while tax rates remain within the competence of each jurisdiction. The paper sets forth the conditions for the reform to be social welfare enhancing, while not increasing tax competition. Among them, the formula should emphasize criteria that the Multijurisdictional Enterprise cannot easily manipulate and the consolidating area should protect its capacity to levy taxes by adopting a crediting system, possibly extended to accrued capital gains, vis-àvis the rest of the world. Policy conclusions are suggested accordingly.
JEL: 
H32
H73
H87
Document Type: 
Working Paper

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