Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26365
Authors: 
Eichner, Thomas
Runkel, Marco
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2320
Abstract: 
This paper contributes to the discussion on Separate Accounting versus Formula Apportionment in the corporate income taxation of multinational enterprises (MNEs). The innovation of the analysis is that we consider a general equilibrium tax competition model with an endogenously determined world interest rate. Under the principle of Separate Accounting, it turns out that corporate tax rates may be inefficiently low or high, while under Formula Apportionment corporate tax rates are always inefficiently low. These results are true independent of whether the number of countries is small or large. They reverse the insights obtained by previous studies under the assumption of an exogenously given world interest rate.
Subjects: 
corporate income tax
Separate Accounting
Formula Apportionment
JEL: 
H7
H73
Document Type: 
Working Paper

Files in This Item:
File
Size
208.39 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.