Saving taxes through foreign plant ownership

• 成果类型: Article
• 署名作者: Egger, Peter; Eggert, Wolfgang; Winner, Hannes
• 署名单位: Swiss Federal Institutes of Technology Domain; ETH Zurich; University of Nottingham; University of Paderborn; Salzburg University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2009.12.004
• 发表日期: 2010
• 页码: 99-108
• 关键词: Company taxation; multinational firms; Propensity score matching

摘要

This paper analyzes to which extent foreign plant ownership involves lower tax payments than domestic plant ownership. We assess hypotheses about the tax savings of endogenous foreign subsidiary ownership relative to domestic firms in a data-set of 507,542 foreign- and domestically-owned manufacturing plants in Europe. We identify a significant profit tax saving of endogenous foreign ownership in high-tax host countries. There is evidence of profit shifting which seems more pronounced than debt shifting in Europe: multinationals earn significantly higher profits than comparable domestic units in low-tax countries but significantly lower ones in high-tax countries. Consequently, profit tax payments of foreign-owned firms are lower than those of domestic firms in high-tax countries but higher in low-tax countries. (C) 2009 Elsevier B.V. All rights reserved.