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Evaluating the effects of ACE systems on multinational debt financing and investment

Hebous, Shafik; Ruf, Martin - 2015

Theory recommends aligning the tax treatment of debt and equity. A few countries, notably Belgium, have introduced an …

Persistent link: https://www.econbiz.de/10010519931

Taxation and the optimal constraint on corporate debt finance

Sørensen, Peter Birch - 2014

The tax bias in favour of debt finance under the corporate income tax means that corporate debt ratios exceed the socially optimal level. This creates a rationale for thin-capitalization rules limiting the amount of debt that qualifies for interest deductibility. This paper sets up a model of...

Persistent link: https://www.econbiz.de/10010438191

Optimal policies against profit shifting : the role of controlled-foreign-company rules

Haufler, Andreas; Mardan, Mohammed; Schindler, Dirk - 2016

By introducing controlled-foreign-company (CFC) rules, the parent country of a multinational firm reserves the right to tax the income of the firm's foreign affiliates if the tax rate in the affiliate's host country is below a specified threshold. We identify the conditions under which binding...

Persistent link: https://www.econbiz.de/10011451112

The importance of escape clauses : firm response to thin capitalization rules

Andresen, Martin Eckhoff; Thorvaldsen, Lars - 2022

Escape clauses, where small firms are exempt from particular tax rules, is a crucial feature of a number of corporate tax schemes, but creates incentives to avoid taxation by manipulating the measures that determine inclusion. We evaluate the impact of thin capitalization rules, which commonly...

Persistent link: https://www.econbiz.de/10013475261

Taxing multinationals in the presence of internal capital markets

Köthenbürger, Marko; Stimmelmayr, Michael - 2013 - This version: July 2013

There is ample evidence that internal capital markets incur efficiency costs for multinational enterprises (MNEs). This paper analyzes whether tax avoidance behavior interacts with the costs of running an internal capital market and how policies of competing governments respond to it. We show...

Persistent link: https://www.econbiz.de/10009773919

Corporate profit shifting and the role of tax havens : evidence from German country-by-country reporting data

Fuest, Clemens; Hugger, Felix; Neumeier, Florian - 2021

annual tax base loss for Germany amounts to EUR 5.4 billion. Adding estimates of profit shifting by multinationals not … covered by the CbC data yields an overall estimate for profits shifted out of Germany to tax havens of EUR 19.1 billion per … year, corresponding to 4.3% of the profits reported by these firms in Germany. This implies a tax revenue loss due to …

Persistent link: https://www.econbiz.de/10012417748

Corporate taxes and multi-product exporters : theory and evidence from trade dynamics

Flach, Lisandra; Irlacher, Michael; Unger, Florian - 2019

This paper analyzes how exporters are affected by corporate tax reforms in destination markets. We introduce tax policy in a trade model of multi-product firms and show that producers face tougher competition in export markets with lower corporate tax rates. This competitive effect induces firms...

Persistent link: https://www.econbiz.de/10012064599

Tax revenue losses through cross-border loss offset : an insurmountable hurdle for formula apportionment?

Mardan, Mohammed; Stimmelmayr, Michael - 2017

This paper analyzes the relevance of firm losses for tax revenues and welfare when switching from separate accounting to a system of tax base consolidation with formula apportionment. We find that a system change unambiguously decreases tax revenues in the short run, in which neither firms nor...

Persistent link: https://www.econbiz.de/10011611957

Thin-capitalization rules and company responses experience from German legislation

Weichenrieder, Alfons J. (contributor); … - 2008

By granting intracompany loans to their foreign affiliates, multinational firms may reduce their tax liability abroad. Many countries have legislated thin-capitalization rules (TCRs) that limit the allowable levels of intracompany loans or restrict interest deductibility if certain thresholds...

Persistent link: https://www.econbiz.de/10003790755

The tax-efficient use of debt in multinational corporations

Møen, Jarle; Schindler, Dirk; Schjelderup, Guttorm; … - 2018

theory model using data on the universe of German multinationals. The empirical analysis largely supports our model in that …

Persistent link: https://www.econbiz.de/10011872932

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