Why the European Union Should Adopt Formula Apportionment with a Sales Factor*
用一个两国税收竞争模型分析欧盟公司所得税从独立核算转向公式分配的效果，发现采用销售因素公式可减轻税收外部性，提高平均税率2%、税收收入10亿欧元，并增进福利。
Abstract Using a two‐country tax competition model with a multinational enterprise (MNE), this paper addresses the question of whether the European Union should replace separate accounting (SA) in corporate income taxation by formula apportionment (FA) and, if so, which apportionment factors should be used. Our main result is that FA with a sales factor may mitigate or even eliminate fiscal externalities caused by the countries' tax policy. Hence, our analysis provides a microfoundation for the sales apportionment factor. In an empirical calibration to the EU‐15 we show that the transition from SA to FA with a sales‐only formula raises average tax rates by 2% and average tax revenues by 1 billion euros or 0.1% of GDP. These effects result in an increase of welfare.