This paper studies how the global minimum tax shapes national tax policies and welfare in a formal model of international tax competition with heterogeneous countries. The net welfare effect is generally ambiguous from the perspective of non-havens. On the one hand, the global minimum tax raises...

The recent international agreement on a minimum effective corporate tax rate marks a profound change in global tax arrangements. The appropriate level of that minimum, however, has been, and remains, extremely contentious. This paper explores the strategic responses to a minimum tax, which the...

We study the aggregate and distributional consequences of replacing corporate profit taxes with shareholder taxes, namely taxes on dividends and capital gains, in a setting with incomplete markets and heterogeneity at both the household and the firm level. The reform yields distributional gains...

This paper aims to examine whether effective tax rate and firm-specific factors (such as firm size, growth opportunities, tangibility, risk, profitability, non-debt tax shields and liquidity) impact the capital structure of multinational firms in the energy sector. We employ regression models...

This paper uses micro data from country-by-country reporting of more than 3600 large multinational companies operating in 238 jurisdictions to analyze global profit shifting to avoid taxes. These companies report 7% of their global profits in jurisdictions with effective average tax rates below...

This paper examines the profit-shifting behaviour of emerging multinational firms from India. It is found that the before-tax profitability of subsidiaries differs according to whether they were established directly or via an Offshore Financial Centre (OFC). The impact of the corporate tax rate...

Research on profit shifting by multinational corporations in developing countries is limited due to a lack of data. In this paper we use, for the first time, novel administrative data on the transactions of multinational corporations operating in Nigeria vis-à-vis related parties in other...

Corporate tax avoidance hampers domestic revenue mobilization and, with it, the development of lower- and middle-income countries. While a wide range of studies has shed light on the magnitude of profit shifting by multinational corporations, the indirect costs of this behaviour is...

Illicit financial flows directly impact a country's ability to raise, retain, and mobilize its own resources to finance sustainable development. Against a backdrop of a weak public financial position attributed to capital flight, tax avoidance, and dependence on corporate income taxes,...

Do sovereign bond investors care about taxation in the countries where they invest? In this paper, I examine the response of sovereign spreads to changes in tax revenues, bases and rates. In simple OLS regressions there is a negligible relationship between sovereign spreads and taxation....

The aim of this study is to review the level of debt and the impact of taxation on the capital structure of companies operating within national and multinational corporate groups in the countries of the Visegrad Group. In the research, financial data was used from 2012-2018 regarding entities...

The institutional literature suggests that long-term tax incentives are crucial for entrepreneurs, but studies on this topic are hampered by theoretical and empirical problems related to how to define and measure entrepreneurial income. We resolve these problems by drawing on a theoretical...

The institutional literature suggests that long-term tax incentives are crucial for entrepreneurs, but studies on this topic are hampered by theoretical and empirical problems related to how to define and measure entrepreneurial income. We resolve these problems by drawing on a theoretical...

In this research paper, we attempt to estimate the tax revenues to be gained (or lost) by the South Centre and African Union's Member States under the Amount A and Article 12B regimes. Our analysis relied on sources of information available to private sector researchers but did not involve...

This paper estimates the causal effect of corporate tax hikes on firm investment based on more than 1,400 local tax changes. By observing planned and realized investment volumes in a representative sample of German manufacturing firms, we can study how tax hikes induce firms to revise their...

Firms constantly face new and more stringent tax disclosure requirements and, increasingly, paying a fair share of tax is seen as part of corporate social responsibility. In this paper, we investigate whether mandating qualitative tax disclosure leads to intended outcomes, using, as an exogenous...

The empirical literature on the impact of corporate taxes on economic growth reaches ambiguous conclusions: corporate tax cuts increase, reduce, or do not significantly affect growth. We apply meta-regression methods to a novel dataset with 441 estimates from 42 primary studies. There is...

Several countries around the world have implemented a tax on digital services, commonly called Digital Services Tax (DST). This policy brief takes a closer look at why some European countries have imposed DSTs but not others. Surely, there are economic explanations behind the fact that Austria,...

An initiative is needed to break the logjam in the international negotiations to reform taxation of multinational enterprises (MNEs). The explosion of profit shifting observed since the 1990s has resulted in hundreds of billions of dollars of tax revenues being lost around the world each year -...

Das ifo Institut hat im Juni 2020 eine Prognose zu den Auswirkungen vorgelegt, die sich auf das deutsche Ertragsteueraufkommen durch eine Umsetzung der OECD-Vorschläge zur Neuverteilung der Besteuerungsrechte ergeben könnten. In ihrem Basisszenario geht die Studie von einem Zuwachs von rd. 600...

Der Beitrag von Kulemann und Mandler in dieser Ausgabe des ifo Schnelldienstes enthält neben einer positiven Würdigung des Gutachtens auch einige kritische Anmerkungen. Die Kritik bezieht sich im Wesentlichen auf drei Aspekte: die Auswahl der Parameter im Basisszenario, die Berücksichtigung...

There has been a pronounced change in the formulas states use to apportion the income of multistate corporations from one that placed equal weight on payroll, profits, and sales to one that places at least half the weight on sales, and eight base apportionment solely on sales. This paper, which...

This paper examines how corporate taxation of multijurisdictional firms using formula apportionment affects the incentives faced by individual firms and individual states. We find that formula apportionment creates factor price distortions which vary in general among firms within a state, and in...

The paper discusses the effects of the corporate tax on local R&D expenditures by multinational enterprises (MNEs) when income from intellectual property (IP) may or may not benefit from a special IP regime. Our model shows that an increase of the standard corporate tax may have positive effects...

This is a response to Professor Avi-Yonah's paper on a "New Corporate Tax" (2021). This paper's aim is to discuss the justifications and aims of a corporate tax and corporate tax policy. Specifically, this paper seeks to understand Avi-Yonah's proposal of a graduated system for the corporate...

This paper examines the intertemporal effect of corporate income taxation on the investment behavior of a firm that faces imperfect capital markets. It shows that when capital markets are imperfect, the optimizing firm goes through different phases of growth. In this dynamic setting, the effect...

Small firms suffer far more than large firmsSuccessive governments have promised to reduce business red tape, whilst doing nothing about it. In fact, with regard to the tax system, ever-greater numbers of taxes and ever-greater complexity have increased burdens on businesses by turning firms...

Integration of the corporate and individual income taxes can be achieved by providing shareholders a credit for corporate taxes paid with respect to corporate earnings distributed as dividends. When such integration was previously considered in the U.S., proponents emphasized that it could...

This study examines the relation between corporate tax avoidance and firm-level productivity. Using a sample of U.S.-listed firms from 1994 to 2017, we show that, ceteris paribus, greater tax avoidance leads to increased productivity. Consistent with the ''funding gap'' of innovative investments...

This paper examines changes in the role that auditors play in corporate tax planning following recentevents, including the well-known accounting scandals, passage of the Sarbanes-Oxley Act, andregulatory actions by the SEC and PCAOB. On the whole, these events have increased thesensitivity to...

Corporation tax is an inefficient way to raise state revenue. It has a negative impact on growth, investment, and entrepreneurship. A 2014 review of the literature found that 57.6% of the amount raised by corporation tax is born by workers. Since 1981, the average corporate tax rate in key OECD...

Taxes are acknowledged by the United Nations to play a vital role in achieving the Sustainable Development Goals, while, according to the World Economic Forum, stakeholders’ increasing interest in societal impact and greater demand for transparency are encouraging firms to go beyond simply...

In this article, Professor Pomp details the dispute behind New Hampshire’s pending motion in the U.S. Supreme Court.The issue is whether Massachusetts may constitutionally subject remote-working nonresidents to its income tax when, prior to the pandemic, those workers commuted in-state.It is...

Business owners in the United States are disproportionately represented among the wealthy and are exposed to substantial idiosyncratic risk. Further, recent evidence indicates that business income primarily reflects returns to the human capital of the owner. Motivated by these facts, this paper...

This report examines the need for disclosure of state corporate income tax data in order to facilitate more thoughtful tax policymaking as well as accountability and openness in government. While disclosure of federal income tax data has been resolved by the SEC’s required disclosures of...

This paper explores the normative theory of international taxation by recasting it in parallel with the theory of international trade. It first sets out a definition of 'free trade taxation,' first in the global context and then in the unilateral context. It then evaluates against this standard...