Buettner, Thiess, Overesch, Michael ORCID: 0000-0002-1531-0357 and Wamser, Georg (2018). Anti profit-shifting rules and foreign direct investment. International Tax and Public Finance, 25 (3). 553 - 581. DORDRECHT: SPRINGER. ISSN 1573-6970

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Abstract

This paper explores the effects of unilateral tax provisions aimed at restricting multinationals' tax planning on foreign direct investment (FDI). Using a unique dataset which allows us to observe the worldwide activities of a large panel of multinational firms, we test how limitations of interest tax deductibility, so-called thin-capitalization rules, and regulations of transfer pricing by the host country affect investment and employment of foreign subsidiaries. The results indicate that introducing a typical thin-capitalization rule or making it more tight exerts significant adverse effects on FDI and employment in high-tax countries. Moreover, in countries that impose thin-capitalization rules, the tax-rate sensitivity of FDI is increased. Regulations of transfer pricing, however, are not found to exert significant effects on FDI or employment.

Item Type: Journal Article
Creators:
CreatorsEmailORCIDORCID Put Code
Buettner, ThiessUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
Overesch, MichaelUNSPECIFIEDorcid.org/0000-0002-1531-0357UNSPECIFIED
Wamser, GeorgUNSPECIFIEDUNSPECIFIEDUNSPECIFIED
URN: urn:nbn:de:hbz:38-185821
DOI: 10.1007/s10797-017-9457-0
Journal or Publication Title: International Tax and Public Finance
Volume: 25
Number: 3
Page Range: 553 - 581
Date: 2018
Publisher: SPRINGER
Place of Publication: DORDRECHT
ISSN: 1573-6970
Language: English
Faculty: Unspecified
Divisions: Unspecified
Subjects: Management and auxiliary services
Uncontrolled Keywords:
KeywordsLanguage
THIN-CAPITALIZATION RULES; COMPETITION LESS HARMFUL; TAX COMPETITION; CORPORATE-TAXATION; INTERNAL DEBT; INCOME; IMPACT; FIRMS; MULTINATIONALS; COUNTRIESMultiple languages
EconomicsMultiple languages
Refereed: Yes
URI: http://kups.ub.uni-koeln.de/id/eprint/18582

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