Immobilizing corporate income shifting: Should it be safe to strip in the harbor?

• 成果类型: Article
• 署名作者: Gresik, Thomas A.; Schindler, Dirk; Schjelderup, Guttorm
• 署名单位: University of Notre Dame; Norwegian School of Economics (NHH)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/j.jpubeco.2017.06.001
• 发表日期: 2017
• 页码: 68-78
• 关键词: multinational; Income-shifting; Safe harbor; Earnings stripping

摘要

Many subsidiaries can deduct interest payments on internal debt from their taxable income. By issuing internal debt from a tax haven, multinationals can shift income out of host countries through the interest rates they charge and the amount of internal debt they issue. We show that, from a welfare perspective, thin capitalization rules that restrict the amount of debt for which interest is tax deductible (safe harbor rules) are inferior to rules that limit the ratio of debt interest to pre-tax earnings (earnings stripping rules), even if a safe harbor rule is used in conjunction with an earnings stripping rule. (C) 2017 Elsevier B.V. All rights reserved.