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A race beyond the bottom: The nature of bidding for a firm

Furusawa, Taiji; Hori, Kazumi; Wooton, Ian - 2010

We examine how the bidding environment may affect the outcome of tax competition between two countries (or two regions) in attracting a firm's foreign direct investment (FDI).We compare the equilibrium location choice and payoffs from an English auction, with both complete and incomplete...

Persistent link: https://www.econbiz.de/10010270462

Do Countries Compensate Firms for International Wage Differentials?

Mittermaier, Ferdinand; Rincke, Johannes - 2010

We address the role of labor cost differentials for national tax policies. Using a simple theoretical framework with two countries competing for a mobile firm, we show that in a bidding race for FDI, it is optimal for governments to compensate firms for international labor cost differentials....

Persistent link: https://www.econbiz.de/10010275010

Preferential trade agreements and tax competition for foreign direct investment

Raff, Horst - 2002

This paper examines how free-trade agreements and customs unions affect the location of foreign direct investment (FDI) and social welfare, taking into account that governments may adjust taxes and external tariffs to compete for FDI. Conditions are identified under which a free-trade agreement...

Persistent link: https://www.econbiz.de/10011410658

The effect of cross-border group taxation on ownership chains

Rünger, Silke - 2015

I examine the influence of cross-border group taxation on ownership chains for European multinational firms. I show … that the tax advantages of cross-border group taxation regimes can only be exploited if a multinational firm has at least … one intermediate subsidiary in the country allowing for cross-border group taxation. I use the introduction of the …

Persistent link: https://www.econbiz.de/10011346703

Optimal policies against profit shifting : the role of controlled-foreign-company rules

Haufler, Andreas; Mardan, Mohammed; Schindler, Dirk - 2016

By introducing controlled-foreign-company (CFC) rules, the parent country of a multinational firm reserves the right to tax the income of the firm's foreign affiliates if the tax rate in the affiliate's host country is below a specified threshold. We identify the conditions under which binding...

Persistent link: https://www.econbiz.de/10011451112

Profit shifting and industrial heterogeneity

Barrios Cobos, Salvador; D'Andria, Diego - 2016

Base erosion and profit shifting (BEPS) undermines tax revenues collection and raises public discontent in times when the tax burden has increased significantly for households in most developed economies. In addition, new forms of profit shifting related to intangible investment have emerged...

Persistent link: https://www.econbiz.de/10011981991

Negotiated tax havens

Markle, Kevin; Robinson, Leslie - 2018

Tax subsidies alter the distribution of tax burdens in ways that blur the ability of researchers and policymakers to measure tax incentives at the country level, to clearly define a tax haven, and to understand firm-level tax avoidance. In the European Union (EU), control of “state aid”...

Persistent link: https://www.econbiz.de/10011997537

Taxing multinationals beyond borders : financial and locational responses to CFC rules

Clifford, Sarah - 2017

Using a large panel dataset on worldwide operations of multinational firms, this paper studies one of the most advocated anti-tax-avoidance measures: Controlled Foreign Corporation rules. By including income of foreign low-tax subsidiaries in the domestic tax base, these rules create incentives...

Persistent link: https://www.econbiz.de/10011662878

Evaluating the effects of ACE systems on multinational debt financing and investment

Hebous, Shafik; Ruf, Martin - 2015

Theory recommends aligning the tax treatment of debt and equity. A few countries, notably Belgium, have introduced an allowance for corporate equity (ACE) to achieve tax neutrality. We study the effects of adopting an ACE on debt financing, passive investment, and active investment of...

Persistent link: https://www.econbiz.de/10010519931

Asymmetric capital tax competition with profit shifting

Stöwhase, Sven - 2004

This paper analyses capital tax competition between jurisdictions of different size when multinational firms can shift some fraction of their tax base between them. For the case of revenue maximizing governments, we show that introducing profit shifting will not generally increase downward...

Persistent link: https://www.econbiz.de/10010440459