Home or away? Profit shifting with territorial taxation

• 成果类型: Article
• 署名作者: Langenmayr, Dominika; Liu, Li
• 署名单位: International Monetary Fund
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2022.104776
• 发表日期: 2023
• 关键词: Profit shifting; Territorial tax system; multinational firms

摘要

In 2009, the United Kingdom abolished the taxation of profits earned abroad and introduced a territorial tax system. Under the territorial system, firms have strong incentives to shift profits abroad. Using a difference-in-differences research design, we show that the profitability of UK subsidiaries in low-tax countries increased after the reform compared to subsidiaries of non-UK multinationals in the same countries by an average of 2 percentage points. The shifted profits originate largely in the UK headquar-ters and its domestic affiliates, not in other high-tax affiliates.(c) 2022 Published by Elsevier B.V.