Volume 31, Issue 1
  • E-ISSN: 2076099X


Using recently published country-by-country reporting data released by the United States Internal Revenue Service, we assess United States multinationals’ activity in the single market, aiming to contribute with databased evidence to the ongoing political debate about the potential changes in the European corporate tax system. Our findings show evidence of artificial profit shifting across member States under the current method to allocate profits of multinational enterprises, with the Netherlands, Luxembourg and Ireland appearing to be the countries showing a higher degree of complicity with these activities. Such actions challenge fair international taxation in the European Union, distorting European internal competition and hampering tax revenue collection. Although it may not be (yet) the time for a worldwide unitary taxation approach, the analysis highlights the urgency for the European Union to adopt a formulary apportionment approach, overhauling a century-old set of global tax rules based on the separate entity approach.

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