Tax losses and ex-ante offshore transfer of intellectual property

• 成果类型: Article
• 署名作者: Sharma, Rishi R.; Slemrod, Joel; Stimmelmayr, Michael
• 署名单位: Colgate University; University of Michigan System; University of Michigan; University of Bath; Swiss Federal Institutes of Technology Domain; ETH Zurich
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2023.104967
• 发表日期: 2023
• 关键词: INTELLECTUAL PROPERTY; corporate taxation; Loss offset; Tax avoidance

摘要

We develop a positive model of multinational firm behavior and analyze a firm's incentive to transfer an intellectual property (IP) right of uncertain value offshore ex ante, i.e. before its success or failure is realized. Our analysis highlights two major aspects of this decision. First, an asymmetric treatment of project gains and losses in the home country creates an incentive to transfer IP to a foreign low-tax country to avoid potentially negative profits at home. These incentives exist even when IP is priced at a fair arms-length price and are further strengthened in the presence of R&D tax incentives. Second, when multinationals have private information about the probability of project success, they have an incentive to transfer their most promising IP ex ante.