Universität zu Köln

Overesch, Michael ORCID: 0000-0002-1531-0357, Strueder, Sabine and Wamser, Georg (2020). DO US FIRMS AVOID MORE TAXES THAN THEIR EUROPEAN PEERS? ON FIRM CHARACTERISTICS AND TAX LEGISLATION AS DETERMINANTS OF TAX DIFFERENTIALS. National tax journal, 73 (2). 361 - 401. WASHINGTON: Univ. of Chicago Press. ISSN 1944-7477

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Abstract

Using pairs of similar U.S. and European firms listed on the S&P 500 or Stoxx Europe 600, we examine effective tax differentials between U.S. multinational corporations (MNCs) and their European peers. We particularly focus on the influence of tax policy on tax differentials between MNCs from the United States and Europe. Our findings suggest that U.S. MNCs had been avoiding more taxes compared to their European peers before the 2017 U.S. tax reform. Furthermore, results show that U.S. MNCs compensated for about half of the significantly larger statutory tax burden before the U.S. tax reform by avoiding more taxes than their European peers. Based on past reforms, we confirm that international tax legislation affects effective tax expenses. Our results reveal that more lenient controlled foreign company (CFC) rules are associated with lower effective tax rates. Moreover, our results suggest that the switch to a territorial system reduces deferred taxes, while we find no evidence that current and foreign tax expenses are affected.

Item Type:	Journal Article
Creators:	Creators Email ORCID ORCID Put Code Overesch, Michael UNSPECIFIED orcid.org/0000-0002-1531-0357 UNSPECIFIED Strueder, Sabine UNSPECIFIED UNSPECIFIED UNSPECIFIED Wamser, Georg UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-330944
DOI:	10.17310/ntj.2020.2.03
Journal or Publication Title:	National tax journal
Volume:	73
Number:	2
Page Range:	361 - 401
Date:	2020
Publisher:	Univ. of Chicago Press
Place of Publication:	WASHINGTON
ISSN:	1944-7477
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	Management and auxiliary services
Uncontrolled Keywords:	Keywords Language MULTINATIONAL FIRMS; INCOME; SYSTEM; RATES; TERRITORIAL; HAVENS; DEBT; SIZE Multiple languages Business, Finance; Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/33094