Many subsidiaries can deduct interest payments on internal debt from their taxable income. By issuing internal debt from a tax haven, multinationals can shift income out of host countries through the interest rates they charge and the amount of internal debt they issue. We show that, from a...

We investigate competition for FDI within a region when a foreign multinational firm can profitably exploit differences in statutory corporate tax rates by shifting taxable profits to lower-tax jurisdictions. In such framework we show that targeted tax competition may lead to higher welfare for...

National policymakers addressing international corporate taxation must balance a revenue objective with a need to maintain and augment national economic resources and assist the success of national firms. International collaboration after the First World War established a set of principles that...

We show that corporate taxation systems regarding foreign dividends and capital gains across 49 countries differ in many aspects, contradicting the requirements for capital ownership neutrality and indicating that ownership patterns are distorted. Consequently, a national tax policy maker may...

We investigate real investment, financial revenues and profits in formerly domestic firms once they enter a multinational entity (MNE) through an acquisition. We argue that following the acquisition, those targets are tax-optimized in a profit shifting context if they are acquired by MNEs with...

Many subsidiaries can deduct interest payments on internal debt from their taxable income. By issuing internal debt from a tax haven, multinationals can shift income out of host countries through the interest rates they charge and the amount of internal debt they issue. We show that, from a...

This study investigates if controlled foreign corporation (CFC) rules influence cross-border merger and acquisition (M&A) activity on a global scale. CFC rules are one main anti-tax avoidance measure and potentially lead to immediate taxation of foreign subsidiaries' income at the parent level,...

At present, controlled foreign corporation (CFC) rules are one of the three main anti-tax avoidance laws in developed countries. This paper examines the different CFC rule settings in the OECD and additional countries to show their effects on profit shifting of multinational companies. Using a...

We show that corporate taxation systems regarding foreign dividends and capital gains across 49 countries differ in many aspects, contradicting the requirements for capital ownership neutrality and indicating that ownership patterns are distorted. Consequently, a national tax policy maker may...

While tax havens are known as custodians and intermediaries of assets, this is the first paper to document that havens affect the ownership of assets on a large scale. We investigate cross-border, tax-haven mergers and acquisitions (M&A) using hand-collected data on tax residence laws and a...