Back to Search
Start Over
Anti profit-shifting rules and foreign direct investment.
- Source :
- International Tax & Public Finance; Jun2018, Vol. 25 Issue 3, p553-580, 28p, 7 Charts, 2 Graphs
- Publication Year :
- 2018
-
Abstract
- This paper explores the effects of unilateral tax provisions aimed at restricting multinationals’ tax planning on foreign direct investment (FDI). Using a unique dataset which allows us to observe the worldwide activities of a large panel of multinational firms, we test how limitations of interest tax deductibility, so-called thin-capitalization rules, and regulations of transfer pricing by the host country affect investment and employment of foreign subsidiaries. The results indicate that introducing a typical thin-capitalization rule or making it more tight exerts significant adverse effects on FDI and employment in high-tax countries. Moreover, in countries that impose thin-capitalization rules, the tax-rate sensitivity of FDI is increased. Regulations of transfer pricing, however, are not found to exert significant effects on FDI or employment. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 09275940
- Volume :
- 25
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- International Tax & Public Finance
- Publication Type :
- Academic Journal
- Accession number :
- 129133095
- Full Text :
- https://doi.org/10.1007/s10797-017-9457-0