Against a background of rather mixed evidence about transfer pricing practices in multinational enterprises (MNEs) and varying attitudes on the part of tax authorities, this paper explores how multiple aims in transfer pricing can be pursued across four different transfer pricing regimes. A MNE...

We present 1984 data on U.S. multinationals, their foreign operations, and repatriations received from their controlled foreign corporations (CFCs), and explore the ramifications of the 1986 Tax Reform Act’s lowering of the corporate tax rate from 46 to 34 percent. We identify and quantify the...

This paper reviews the recent theoretical literature that analyzes the European Union's policy to eliminate preferential corporate-tax regimes and the proposal to introduce a consolidated EU tax base with formula apportionment for the taxation of multinational firms. Since neither proposal...

Multinational companies can shift profit and income between branches in order to reduce the overall tax liabilities of the company. The result is a tax competition between countries. In this paper we consider the sequential choice of tax rates to illustrate the potential effects of tax...

This paper examines the effects of state corporate income taxes on the location of foreign direct investment in the U.S., taking into account the endogeneity of taxes and the outside options of investors. States have a set of characteristics that influence investors' decisions, some of them are...

Bilateral tax treaties (BTTs) are intended to promote foreign direct investment through double-taxation relief. Using BEA firm-level data, we find a positive effect of BTTs on FDI, which is larger for firms that use differentiated inputs. BTTs allow multinational firms to request assistance from...

This paper examines empirically how international taxation affects the volume and pricing of cross-border banking activities for a sample of banks in 38 countries over the 1998?2008 period. International double taxation of foreign-source bank income is found to reduce banking-sector FDI....

This paper investigates the effect of tax treaties on bilateral stocks of outward FDI. For this purpose we employ a numerically solvable general equilibrium model of trade and multinational firms to study the impact of tax treaties on both welfare and outward FDI. The model indicates under which...

In 2001, the European Commission endorsed a future company tax strategy that would allow EU companies the option of calculating their EU profits on a common consolidated tax base and allow Member States to tax their share of that base at national rates. Implementing this strategy requires...

We develop a stylized model of international tax competition between a large country and a tax haven. In the large country, firms in a monopolistically competitive industry generate positive profits which can be taxed by the government. Firms have heterogeneous productivity levels and can choose...