Acta Univ. Agric. Silvic. Mendelianae Brun. 2015, 63(6), 1961-1967 | DOI: 10.11118/actaun201563061961

The Influence of Allocation Formula on Generation of Profit in Different Economy Sectors

Kateřina Krchnivá, Danuše Nerudová
Department of Accounting and Taxation, Faculty of Business and Economics, Mendel University in Brno, Zemědělská 1, 613 00 Brno, Czech Republic

The mechanism for the distribution of the Common Consolidated Corporate Tax Base will be based on three macroeconomics factors which are considered to be the main indicators of generated profit/loss. The paper analyzes the explanatory power of proposed allocation formula for the distribution of the Common Consolidated Corporate Tax Base with respect to the sector of economic activity from the perspective of the Czech independent enterprises. The research is based on the comparison of the coefficients of determination indicating the proportion of explained variability of proposed multiple regression models. The paper concludes that the proportion of explained profitability by the allocation formula factors as are defined by the Common Consolidated Corporate Tax Base Draft Directive may differ up to 34% with regard to the sector of economic activity classified by NACE classification.

Keywords: allocation formula, tax harmonization, common consolidated corporate tax base, corporate income tax, profit/loss, coefficients of determination, enterprises
Grants and funding:

The paper was funded by an Internal Grant Agency IGA, Grant Project No. PEF_DP_2015_004 called "The impact of the Common Consolidated Corporate Tax Base on the national budget of the Czech Republic", at the Faculty of Business and Economics, Mendel University in Brno.

Prepublished online: December 26, 2015; Published: January 1, 2016  Show citation

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Krchnivá, K., & Nerudová, D. (2015). The Influence of Allocation Formula on Generation of Profit in Different Economy Sectors. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(6), 1961-1967. doi: 10.11118/actaun201563061961
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