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Title:Source versus residence based taxation with international mergers and acquisitions PDF Logo
Authors:Becker, Johannes
Fuest, Clemens
Issue Date:2009
Series/Report no.:CESifo working paper 2854
Abstract:This paper analyses tax competition and tax coordination in a model where capital flows occur in the form of mergers and acquisitions, rather than greenfield investment. In this framework, we show that differences in residence based taxes do not necessarily distort international ownership patterns. Moreover, tax competition yields globally efficient levels of source based corporate income taxes if residence based taxes on capital income are absent. In contrast, in the presence of residence based taxes on dividends, source based corporate income taxes are inefficiently high. The widespread view that tax coordination is less urgent if residence based taxes are available may therefore be misguided.
Subjects:corporate taxation
tax competition
mergers and acquisitions
JEL:H54
H25
F23
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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