The effect of a worldwide tax system on tax management of foreign subsidiaries
Bibliographic Data
| ID | 21410035 |
|---|---|
| Authors | Saskia Kohlhase (0000-0002-7763-8446, Erasmus University Rotterdam, corresponding author), Jochen Pierk (0000-0002-0776-0542, Erasmus University Rotterdam) |
| Year | 2020 |
| Volume | 51 |
| Issue | 8 |
| Pages | 1312-1330 |
| Publication date | 2020-10-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of International Business Studies (JOURNAL) |
| Journal identifiers | ISSN: 0047-2506 • E-ISSN: 1478-6990 |
| Publisher | Springer Science and Business Media LLC (PUBLISHER) |
| DOI | 10.1057/s41267-019-00287-9 |
| OpenAlex | W2990572151 |
| Language | EN |
| Citations received | 6 |
| References cited | 46 |
Under a worldwide tax system, firms pay taxes on their domestic income and repatriated foreign income, whereas under a territorial tax system repatriated foreign income is exempt from taxation. We examine whether worldwide tax systems reduce the incentives of multinational corporations to engage in tax management in their foreign subsidiaries. Using two quasi-natural experiments, we show that multinationals lower the effective tax rates in their foreign subsidiaries after countries switch from a worldwide to a territorial tax system. Thus, multinationals subject to a worldwide tax system face competitive disadvantages compared to competitors from countries with a territorial tax system
Ad valorem tax · Business · Double taxation · Economics · Indirect tax · International economics · International taxation · International trade · Market economy · Multinational corporation · Public economics · Subsidiary · Tax avoidance · Tax reform · Value-added tax · Corporate Finance and Governance · Corporate Taxation and Avoidance · Finance · Taxation and Compliance Studies
| Citations per year | 1.2 |
|---|---|
| Citation span | 2021 - 2026 (6) |
| Highly cited | No |