Under a worldwide tax system, firms pay taxes on their domestic income and repatriated foreign income, whereas under a territorial tax system repatriated foreign income is exempt from taxation. We examine whether worldwide tax systems reduce the incentives of multinational corporations to engage...

This study investigates to what extent U.S. multinational corporations’ (MNCs) executives affect the tax planning of their foreign subsidiaries. Our results show that parent executives (CEOs and CFOs) do not affect foreign subsidiaries’ tax planning (profit shifting and effective tax rates)....

Top executives of the parent company often take positions as the directors and officers (D&Os) of subsidiaries. These parent-subsidiary common D&Os have better access to subsidiary information and can exert more influence over subsidiary operations. Therefore they can better identify tax...