Strategic taxation of the multinational enterprise: A new argument for double taxation

• 成果类型: Article
• 署名作者: Konan, DE
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(96)01592-7
• 发表日期: 1997
• 页码: 301-309
• 关键词: direct foreign investment; double taxation

摘要

This paper analyzes the social welfare effects of multinational enterprise taxation by home and host governments. In a general equilibrium model, direct foreign investment arises to employ a firm-specific asset abroad. Either a tax credit or deduction for foreign taxes paid results in the host fully taxing locally earned economic profits. Welfare, endogenous market structure, and profit results are identical in tax credit and deduction regimes. Because it lowers host government taxation in the subgame-perfect equilibrium, double taxation of foreign-earned profits emerges as a weakly dominant strategy for the source government.