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Lost In Translation? Rethinking The Oil And Gas Industry Formula Under The Common Consolidated Corporate Tax Base Directive Proposal, Societas et iurisprudentia

My paper "Lost In Translation? Rethinking The Oil And Gas Industry Formula Under The Common Consolidated Corporate Tax Base Directive Proposal" is published at Journal Societas et iurisprudentia, Trnava University.

 Abstract

The oil and gas industry is an important industry for several European countries. Due to the uniqueness of the industry, there have been special corporate taxation rules for the oil and has industry when a jurisdiction adopts formulary apportionment rules for levying cross-border corporate taxation. Alaska of USA is a typical jurisdiction where a special formula for the oil and gas industry is provided and the Common Consolidated Corporate Tax Base (CCCTB) Directive Proposal under the EU law has also a special formula for the oil and gas industry, due to the influence from USA formulary apportionment experiences. Based on the comparison between the CCCTB and Alaska experiences, this paper shows that, CCCTB’s oil and gas industry formula has two theoretical flaws. The paper suggests that the fundamental rationale for the oil and gas industry should reaffirm the importance of the source origin, and a special asset factor is necessary for the oil and gas industry for improving the current CCCTB Directive Proposal. The current CCCTB Directive Proposal has made the effort to take into account the interests of the natural resource origin countries, but it used the wrong policy tool. The original aim of the oil and gas industry formula is not achieved and new tax planning loopholes are created. CCCTB’s oil and gas industry formula is also a typical example that illustrates the risk of “lost in translation” in comparative law research and legal transplantation. 

Key words: oil and gas industry, Formulary Apportionment, CCCTB, Alaska, European Union

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