Real responses to anti-tax avoidance: Evidence from the UK Worldwide Debt Cap

• 成果类型: Article
• 署名作者: Bilicka, Katarzyna; Qi, Yaxuan; Xing, Jing
• 署名单位: Utah System of Higher Education; Utah State University; National Bureau of Economic Research; City University of Hong Kong; Shanghai Jiao Tong University
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2022.104742
• 发表日期: 2022
• 关键词: Debt Shifting; Multinational Companies; Capital Reallocation

摘要

We analyze how multinational firms reallocate real operations and debt across their affiliates in response to anti-tax avoidance policies. The UK introduced a worldwide debt cap in 2010, generating a quasi -natural experiment that limited interest deductibility for a group of multinational firms. We find that multinationals affected by the reform reduced the amount of debt held in the UK and increased debt held abroad. Affected multinationals reallocated a share of their real operations away from the UK. Our find-ings provide causal evidence for tax-motivated debt and real activity reallocation within multinationals and show how multinationals can circumvent tax avoidance regulations.1 (c) 2022 Elsevier B.V. All rights reserved.