| Summary: | The creation of a group taxation framework to subject affiliated entities resident in more than one EC Member State to a single set of rules is all experiment without precedent. Group taxation normally deals with tax liability in the context of a single jurisdiction. There is no system of group taxation worldwide which embraces more than one fiscal jurisdiction under a single regulatory umbrella. This thesis explores the prospect for creating a group taxation system extending across national borders in the EC. The objective is to specify what shape the elements of such a system should take as well as to identify the areas of complexity or probable impasse. The first two chapters set the background: the jurisprudential and legislative framework of the EIM within. which any potential group taxation project should develop. The third chapter surveys the tax systems of Canada, Switzerland and the US with a focus on the principles pertaining to the division of power between the federal and sub-federal tiers. Chapter 4 presents and debates the policies for corporate taxation in integrated markets. An attempt is made to answer whether regulation Should be treated as a prerequisite for corporate tax coordination. The objectives of the EIM and possible instruments leading to their attainment are placed within the framework of a group taxation scheme. Chapter 5 classifies the issues relevant to the administration of the scheme into four categories: compliance, enforcement, dispute resolution and re-assessment of tax liability. As the unique constitutional structure of the EIM cannot easily be linked to a precedent, the discussion is more about setting the principles of a new construction rather than proposing adjustments to existing schemes. Chapter 6 aims at setting forth a test for entitlement to group membership. It discusses established tests and advances arguments for an ownership criterion based on a holding percentage. Chapter 7 focuses on tax base integration. The approach taken is in favour of a broad definition which does not introduce a distinction between business and non-business income. The territorial delineation of the group is explored in chapter 8. The discussion starts from the assumption that 'water's edge' is applicable. This chapter examines the interaction between formulary apportionment (FA) and the international tax law principles of source/residence. Chapter 9 explores FA. The specific formulation of the mechanism for apportionment is primarily an economists' responsibility. This thesis limits itself to comments of a legal nature, such as the amount of diversity that should be allowed, without causing distortion, in the formulae applicable across the EC. Finally, conclusions are drawn about the research questions posed.
|
|---|
