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Reconsidering formulary apportionment in the post-BEPS Era

Reconsidering formulary apportionment in the post-BEPS Era

Author: Jie Wang
Publisher: Kluwer Law International
ISBN: 9789403527291
Published In: December 2025
Format: Hardback
Jurisdiction: Netherlands ? Disclaimer:
Countri(es) stated herein are used as reference only

List Price: HKD 1,448.08

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Description
Contents

Details

Reconsidering Formulary Apportionment in the Post-BEPS Era is a ground-breaking book exploring in great depth how formulary apportionment (FA) – by which multinational enterprises (MNEs) allocate profits across countries based on real activity in each jurisdiction, thus removing the incentive to shift reported income to low-tax locations – can become a fundamental reform option in the evolving context of international taxation. The OECD’s Base Erosion and Profit Shifting (BEPS) Project and its maturing ‘two-pillar solution’ have their origin in a consensus that the existing international tax system requires significant reform, particularly in addressing the taxation of MNEs and the digitalization of the global economy.

What’s in this book:

In light of the fact that FA represents a transition from a bilateral to a multilateral mechanism, it becomes crucial to study how each ‘market country’ assesses its feasibility. This research selects China, thus concentrating on the dynamics of one of the world’s largest economies, and demonstrating the broad implications of China’s ongoing strategic FA experiment for the global tax system.

The author considers and analyses such aspects of the subject as the following:

FA-centred perspective of the evolution of the international tax regime
complexity and nuances involved in transferring equity principles from domestic to international tax contexts
neutrality as an evaluative benchmark in tax policy design
impact and shaping influence of China’s Belt and Road Initiative on its tax policies and strategy, and
recommended formula for an international FA regime to explore

. Included is a comparative study of the current FA systems in the United States, Canada, the European Union’s Common Consolidated Corporate Tax Base (CCCTB) Proposal, and the newly introduced Pillar One Amount A. By deconstructing these systems into constituent elements, the author offers a component-by-component analysis and extracts lessons for the future architecture of international FA, with respect to highlighting its function and what practical lessons can be drawn.

How this will help you:

With the digital transformation exacerbating existing tax system flaws to an intolerable level for most stakeholders, and as dissatisfaction with the current allocation framework has grown among both developing and developed nations, the re-emergence of formulary apportionment is becoming an increasingly concrete reality in the modern global economy. Recognizing the continuing efforts to improve the international tax system, this book explores the foundational values and principles that need to be considered when developing an analytical framework for formulary apportionment, with practical insights for reform on a global level. It will be highly appreciated by tax professionals, policymakers, and researchers worldwide.

List of Abbreviations

List of Equations

List of Figures

List of Tables

CHAPTER 1. Introduction

PART I. Formulary Apportionment at the Historical Turning Point

CHAPTER 2. Historical Analysis: Formulary Apportionment as a Key Indicator

PART II. Some Experience from the Real World

CHAPTER 3. A Comparative Analysis of the ‘Existing’ Formulary Apportionment ‘Regimes’: US, Canada, (the Withdrawn) EU CCCTB Proposal, and the Pillar One Amount A

PART III. Constructing the Analytical Framework for Formulary Apportionment

CHAPTER 4. The Principle of Equity

CHAPTER 5. The Principle of Legitimacy

CHAPTER 6. Efficiency Considerations: The Questionable Usefulness of Neutrality

PART IV. Testing and Experimenting with Formulary Apportionment in China

CHAPTER 7. From Source-Oriented to Residence-Oriented: China’s International Tax Regime Reshaped by BRI

CHAPTER 8. Strategical Viability of China Exploring Formulary Apportionment

CHAPTER 9. China Biting the ‘Wolf Peach’: The Possible Design and the Roadmap

PART V. The Epilogue

CHAPTER 10. Conclusion

Bibliography