Where Does Multinational Investment Go with Territorial Taxation? Evidence from the United Kingdom

• 成果类型: Article
• 署名作者: Liu, Li
• 署名单位: International Monetary Fund
• 刊物名称: AMERICAN ECONOMIC JOURNAL-ECONOMIC POLICY
• ISSN/ISSBN: 1945-7731
• DOI: 10.1257/pol.20180592
• 发表日期: 2020
• 页码: 325-358
• 关键词: repatriation taxes; firms hold; dividend; cost; CONSEQUENCES; allocation; SYSTEM; POLICY; income; cash

摘要

In 2009, the United Kingdom changed from a worldwide to a territorial tax system, abolishing dividend taxes on foreign repatriation from many low-tax countries. This paper assesses the causal effect of territorial taxation on real investments, using a unique dataset for multinational affiliates in 27 European countries and employing the difference-in-differences approach. It finds that the territorial reform has increased the investment rate of UK multinationals by 16.7 percentage points in low-tax countries. In the absence of any significant investment reduction elsewhere, the findings represent a likely increase in total outbound investment by UK multinationals.