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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/10419/19089
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| Title: | | Tax competition when firms choose their organizational form : should tax loopholes for multinationals be closed?  |
| Authors: | | Bucovetsky, Sam Haufler, Andreas |
| Issue Date: | | 2005 |
| Series/Report no.: | | CESifo working papers 1625 |
| Abstract: | | We analyze a sequential game between two symmetric countries when firms can invest in a multinational structure that confers tax savings. Governments are able to commit to long-run tax discrimination policies before firms' decisions are made and before statutory capital tax rates are chosen non-cooperatively. Whether a coordinated reduction in the tax preferences granted to mobile firms is beneficial or harmful for the competing countries depends critically on the elasticity with which the firms' organizational structure responds to tax discrimination incentives. The model can be applied to policy initiatives that aim at a ban on preferential tax regimes and at reducing the profit shifting opportunities for multinational firms. |
| Subjects: | | tax competition multinational firms preferential treatment |
| JEL: | | F23 H73 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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