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Based on a natural experiment that took place in Ecuador in the context of a capital outflow tax, this paper presents suggestive evidence of the emergence of an abnormal transfer pricing behavior. We exploit the fact that some imports were eligible to a tax-credit measure aiming to offset the...
Persistent link: https://www.econbiz.de/10011573228
Profit shifting by multinational corporations is thought to reduce tax revenue around the world. While transfer pricing regulations are meant to curtail profit shifting, there have been rising concerns that a sophisticated tax advisory industry can limit their effectiveness. This paper provides...
Persistent link: https://www.econbiz.de/10014348092
In this study we explore how a firm-level dividend tax on redistributed foreign profits affects the financial decisions of a multinational enterprise (MNE). We examine this by using evidence from a recent tax reform in Finland. The so-called equalization tax (EQT) used to be a regular element of...
Persistent link: https://www.econbiz.de/10011387342
diesel tax paid can be used as a credit against VAT and if diesel is used in freight or public transportation (basically … trucks and buses) a fraction of gasoline taxes paid can be used as a credit against VAT. As a result of this different tax …
Persistent link: https://www.econbiz.de/10013118902
Using pairs of similar US and European firms listed on the S&P500 or StoxxEurope600, we examine effective tax differentials between US multinational corporations (MNCs) and their European peers. We show that statutory tax rates and profit shifting opportunities are important determinants of...
Persistent link: https://www.econbiz.de/10011814838
Using the 2008 corporate tax reform in China as a quasi-natural experiment, we find that compared to unaffected firms, firms facing tax increases report significantly lower profit margins to avoid paying more taxes, while there is no significant difference for firms facing a tax cut. Our results...
Persistent link: https://www.econbiz.de/10013232131
With multinational enterprises (MNEs) centralizing production facilities, market countries claim not to receive their fair share of taxes. A reform of international business taxation that includes new profit allocation rules as well as the introduction of minimum taxation is being considered as...
Persistent link: https://www.econbiz.de/10012605789
burden created by the reform increases by nearly 17% if negative spillovers on VAT base are also taken into account …
Persistent link: https://www.econbiz.de/10013059804
A new size-dependent tax system was introduced in Japan on April 1, 2004. We exploit this exogenous institutional change as a natural experiment and empirically examine how firms endogenously reacted to a size-dependent tax system in terms of both financial and real activities. Using a...
Persistent link: https://www.econbiz.de/10012929775
This paper evaluates the relative importance of labor productivity vs. income taxes and social security contributions for tax compliance in an economy with a large degree of informality. To this end, we build a bargaining model in which matched employer-employee pairs of heterogeneous productive...
Persistent link: https://www.econbiz.de/10011514510