Taxing multinationals beyond borders: Financial and locational responses to CFC rules

• 成果类型: Article
• 署名作者: Clifford, Sarah
• 署名单位: University of Oxford
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2019.01.010
• 发表日期: 2019
• 页码: 44-71
• 关键词: CFC legislation; multinational firms; Tax avoidance; corporate taxation

摘要

Using a large panel dataset on worldwide operations of multinational firms, this paper studies one of the most advocated anti-tax-avoidance measures: Controlled Foreign Corporation rules. By including income of foreign low-tax subsidiaries in the domestic tax base, these rules create incentives to move income away from low-tax environments. Exploiting variation around the tax threshold used to identify low-tax subsidiaries, we find that multinationals redirect profits into subsidiaries just above the threshold and change incorporation patterns to place fewer subsidiaries below and more above the threshold. Roughly half of the resulting increase in global tax revenue accrues to the rule-enforcing country. (C) 2019 Elsevier B.V. All rights reserved.