Open AccessPosted Content
Fiscal Paradise: Foreign Tax Havens and American Business
TLDR
The authors analyzes the origins of this tax haven activity and its implications for the US and foreign governments, showing that American companies report extraordinarily high profit rates on both their real and their financial investments in tax havens.Abstract:Â
The offshore tax haven affiliates of American corporations account for more than a quarter of US foreign investment, an nearly a third of the foreign profits of US firms. This paper analyzes the origins of this tax haven activity and its implications for the US and foreign governments. Based on the behavior of US fins in 1982, it appears that American companies report extraordinarily high profit rates on both their real and their financial investments in tax havens. We calculate from this behavior that the tax rate that maximizes tax revenue for a typical haven is around 6%. The revenue implications for the US are more complicated, since tax havens may ultimately enhance the ability of the US government to tax the foreign earnings of American companies.read more
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Foreign investors' interests and corporate tax avoidance: Evidence from an emerging economy
TL;DR: In this article, the tax impact of foreign investors' interests within a host developing economy was examined, and the analysis of the dynamic panel data with a system GMM estimator showed significant positive relationships between foreign investors interests and the measures of corporate tax avoidance among large Malaysian companies.
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Why Do Firms Hold So Much Cash? A Tax-Based Explanation
TL;DR: The authors found that firms that face higher repatriation tax burdens hold higher levels of cash, hold this cash abroad, and hold this money in affiliates that trigger high tax costs when repatriating earnings.
Posted Content
Taxation and Foreign Direct Investment: A Synthesis of Empirical Research
TL;DR: In this paper, the authors make the outcomes of 25 empirical studies comparable by computing the tax rate elasticity under a uniform definition, and find no systematic differences in the responsiveness of investors from tax credit countries and tax exemption countries.
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Host country reforms and FDI inflows: How much difference do they make?
TL;DR: The authors examined the effects of various policies on foreign direct investment (FDI) flows from the perspective of the "eclectic theory" of international investment, and hence the advantages of foreign ownership, host country location, and internationalization.
Journal ArticleDOI
Lessons from Behavioral Responses to International Taxation
TL;DR: In this paper, the authors consider the impact of international taxa- tion on patterns of foreign direct investment and on the extent of tax avoidance activity and find that taxation significantly influences the location of FDI in- vestment, corporate borrowing, transfer pricing, dividend and roy- alty payments, and R&D performance.
References
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Journal ArticleDOI
Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision Making
Harry Grubert,John Mutti +1 more
TL;DR: In this article, the authors analyzed three interrelated aspects of U.S. multinational corporation activity: the ability to shift profits from high-tax countries to low tax countries, the impact of host country taxes and tariffs on the distribution of real capital, and the influence of these policies on international trade patterns of the United States and host countries.
Posted Content
Investment, Financing Decisions, and Tax Policy
TL;DR: In this article, the role played by average as opposed to marginal tax rates in the investment process is examined. But the authors do not consider the impact of tax rates on investment.
Posted Content
Tax Policy and Foreign Direct Investment
TL;DR: The authors examined the implications of the most common system of taxing foreign source income and concluded that the home country tax acts as an unavoidable cost for multinational firms' investment decisions, and pointed out that mature foreign operations probably account for nearly ninety percent of U.S. foreign direct investment.
ReportDOI
Host Country Benefits of Foreign Investment
TL;DR: In this article, the empirical evidence on the very different conclusions that can be drawn about productivity spillovers of foreign direct investment is reviewed, and host country policy measures which can accelerate both the BC affiliates' technology imports and the diffusion of their technology in the host economies are discussed.
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Taxes, Tariffs and Transfer Pricing in Multinational Corporate Decision Making
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