Universität zu Köln

Buettner, Thiess, Overesch, Michael and Wamser, Georg (2018). Anti profit-shifting rules and foreign direct investment. Int. Tax Public Financ., 25 (3). S. 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:	Creators Email ORCID ORCID Put Code Buettner, Thiess UNSPECIFIED UNSPECIFIED UNSPECIFIED Overesch, Michael UNSPECIFIED UNSPECIFIED UNSPECIFIED Wamser, Georg UNSPECIFIED UNSPECIFIED UNSPECIFIED
URN:	urn:nbn:de:hbz:38-185821
DOI:	10.1007/s10797-017-9457-0
Journal or Publication Title:	Int. Tax Public Financ.
Volume:	25
Number:	3
Page Range:	S. 553 - 581
Date:	2018
Publisher:	SPRINGER
Place of Publication:	DORDRECHT
ISSN:	1573-6970
Language:	English
Faculty:	Unspecified
Divisions:	Unspecified
Subjects:	no entry
Uncontrolled Keywords:	Keywords Language THIN-CAPITALIZATION RULES; COMPETITION LESS HARMFUL; TAX COMPETITION; CORPORATE-TAXATION; INTERNAL DEBT; INCOME; IMPACT; FIRMS; MULTINATIONALS; COUNTRIES Multiple languages Economics Multiple languages
Refereed:	Yes
URI:	http://kups.ub.uni-koeln.de/id/eprint/18582