In this paper, we consider optimal tax enforcement policy in the presence of profit shifting towards tax havens. We … show that, under separate accounting, tax enforcement levels may be too high due to negative fiscal externalities. In … contrast, under formula apportionment, tax enforcement is likely to be too low due to positive externalities of tax enforcement …

fl ow tax (DBCFT). While its global implementation has the potential to substantially increase welfare, a unilateral … introduction of such a tax system raises a range of questions due to the existence of source-based taxation systems abroad. We … consider the US tax plans from an EU perspective. We show that European exporters may suffer, but European fi rms with affi …

Does the reduction of the effective tax burden on corporations trigger foreign direct investment? We take the German … tax reform of 2000 as a natural experiment in order to isolate the impact of corporate taxation on the investment of … we deliberately choose an approach which is likely to underestimate the tax effects on investment we find significant …

In this paper we ask whether recent claims that the US government should switch from the tax credit system to the … investment. In all other cases the deduction system is no longer optimal from a national perspective and the foreign tax credit … system fails to ensure neutrality. However, the desirability of the tax exemption system has to be qualified. We show that …

direct investment flows. High-tax countries may see their tax revenues decrease in response to inbound foreign direct … shifting. Observed profitability differences between high and low tax countries may be due to project selection. Empirical … evidence in support of the main hypotheses is provided using aggregate investment and tax revenue data from a sample of OECD …

In this paper, we analyze tax competition in a model where investor firms have the choice between two types of … intensifies tax competition in comparison to the case where there is only greenfield investment. If a specific tax on acquisitions … is available, this result changes. Then, tax competition is mitigated compared to the pure greenfield case. The existence …

reduction of the firm’s domestic activities. As it is often argued, this finding may imply that a country should not tax … exports or FDI. If a firm switches from exporting to FDI, domestic activity and tax payments may decrease, stay constant or … even rise due to intra-firm trade. It turns out that, in all three cases, the optimal tax system implies full taxation …