RICHARD KREVER
u003cpu003eThe Allocation of Multinational Business Income: Reassessing the Formulary Apportionment Optionu003c/pu003e u003cpu003eEdited by Richard Krever & François Vaillancourtu003c/pu003e u003cpu003eAlthough arm's length methodology continues to prevail in international taxation policy, it has long been replaced by the formulary apportionment method at the subnational level in a few federal countries. Its use is planned for international profit allocation as an element of the European Union's CCCTB proposals. In this timely book - a global guide to formulary apportionment, both as it exists in practice and how it might function internationally - a knowledgeable group of contributors from Australia, Canada, the United Kingdom and the United States, address this actively debated topic, both in respect of its technical aspects and its promise as a global response to the avoidance, distortions, and unfairness of current allocation systems.u003c/pu003e u003cpu003eDrawing on a wealth of literature considering formulary apportionment in the international sphere and considering decades of experience with the system in the states and provinces of the United States and Canada, the contributors explicate and examine such pertinent issues as the following:u003c/pu003e u003culu003e u003cliu003ethe debate about what factors should be used to allocate profits under a formulary apportionment system and experience in jurisdictions using formulary apportionment;u003c/liu003e u003cliu003eapplication of formulary apportionment in specific sectors such as digital enterprises and the banking industry;u003c/liu003e u003cliu003ethe political economy of establishing and maintaining a successful formulary apportionment regime;u003c/liu003e u003cliu003eformulary apportionment proposals for Europe;u003c/liu003e u003cliu003ethe role of traditional tax criteria such as economic efficiency, fairness, ease of administration, and robustness to avoidance and incentive compatibility;u003c/liu003e u003cliu003edetermining which parts of a multinational group are included in a formulary apportionment unit; andu003c/liu003e u003cliu003ewhether innovative profit-split methodologies such as those developed by China are shifting traditional arm's length methods to a quasi-formulary apportionment system.u003c/liu003e u003c/ulu003e u003cpu003eProviding a comprehensive understanding of all aspects of the formulary apportionment option, this state of the art summary of history, current practice, proposals and prospects in the ongoing debate over arm's length versus formulary apportionment methodologies will be welcomed by practitioners, policy-makers, and academics concerned with international taxation, all of whom will gain an understanding of the case put forward by proponents for adoption of formulary apportionment in Europe and globally and the counter-arguments they face. Readers will acquire a better understanding of the implications of formulary apportionment and its central role in the current debate about the future of international taxation rules.u003c/pu003e
