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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18880
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| Title: | | Corporate tax systems, multinational enterprises, and economic integration  |
| Authors: | | Kind, Hans Jarle Midelfart, Karen Helene Schjelderup, Guttorm |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1241 |
| Abstract: | | Multinational firms are known to shift profits and countries are known to compete over shifty profits. Two major principles for corporate taxation are Separate Accounting (SA) and Formula Apportionment (FA). These two principles have very different qualities when it comes to preventing profit shifting and preserving national tax autonomy. Most OECD countries use SA. In this paper we show that a reduction in trade barriers lowers equilibrium corporate taxes under SA, but leads to higher taxes under FA. From a welfare point of view the choice of tax principle is shown to depend on the degree of economic integration. |
| Subjects: | | multinational enterprises economic integration trade costs international tax competition tax regimes |
| JEL: | | H87 H25 F23 F15 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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