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dc.contributor.authorWeichenrieder, Alfons J.en_US
dc.contributor.authorWindischbauer, Helenen_US
dc.date.accessioned2009-01-12en_US
dc.date.accessioned2009-07-28T08:47:35Z-
dc.date.available2009-07-28T08:47:35Z-
dc.date.issued2008en_US
dc.identifier.urihttp://hdl.handle.net/10419/26501-
dc.description.abstractBy granting intracompany loans to their foreign affiliates, multinational firms may reduce their tax liability abroad. Many countries have legislated thin-capitalization rules (TCRs) that limit the allowable levels of intracompany loans or restrict interest deductibility if certain thresholds are crossed. This paper empirically analyzes the effect of the German TCR on corporate policy. We find that tightening the regulations in 2001 had some limiting effect on leverage. Foreign affiliates reacted by reducing intracompany loans and increasing equity, with no significant evidence of reduced real investment. A possible reason for the limited impact of the TCR was that multinational firms had the option to work around the regulation by using holding company structures. Indeed, holding companies have been used to shift huge amounts of intracompany loans onto the books of German affiliates. At the same time, however, only part of these observed reorganizations seem to have been a reaction to TCR.en_US
dc.language.isoengen_US
dc.publisherCESifo Münchenen_US
dc.relation.ispartofseriesCESifo working paper 2456en_US
dc.subject.jelH25en_US
dc.subject.jelG38en_US
dc.subject.ddc330en_US
dc.subject.keywordMultinational firmen_US
dc.subject.keyworddebten_US
dc.subject.keywordthin capitalizationen_US
dc.subject.keywordfinancial structureen_US
dc.subject.stwKapitalstrukturen_US
dc.subject.stwKörperschaftsteuerrechten_US
dc.subject.stwMultinationales Unternehmenen_US
dc.subject.stwGewinnverlagerungen_US
dc.subject.stwDeutschlanden_US
dc.titleThin-capitalization rules and company responses experience from German legislationen_US
dc.typeWorking Paperen_US
dc.identifier.ppn589227882en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungen-
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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