Most studies of tax competition and the race to the bottom focus on potential host countries competing for mobile capital, neglecting the role of corporate tax planning and of home governments that facilitate this planning. This neglect in part reflects the narrow view frequently taken of the...

In this paper the impact of the corporate tax systems of the 15 EU-member states on the investment and the financing decision of an US multinational corporation is analysed. The calculation of the resulting effective marginal tax rates (EMTR) closely follow the model of King and Fullerton. There...

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...