Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/61052
Authors: 
Gérard, Marcel
Princen, Savina
Year of Publication: 
2012
Series/Report no.: 
CESifo Working Paper: Public Finance 3838
Abstract: 
This paper investigates the consequences of a series of alternative international tax designs on the strategy of a multinational enterprise regarding the cross border distribution of its investment and the choice of its financing behavior. We start with a world where no international tax rules are at work. Then we successively introduce (i) the rules provided by the OECD Model Tax Convention, (ii) the EU Parent-Subsidiary Directive of July 23, 1990; and (iii) a combination of Allowance for Corporate Equity (ACE) and Comprehensive Business Income Tax (CBIT). Finally, we leave systems based on Separate Accounting (SA) aside and turn to Consolidation and Formulary Apportionment (C&FA) adopted either by all the jurisdictions at work in the model, or by a sole subset of them within the framework of an Enhanced Cooperation Agreement (ECA).
Subjects: 
corporate tax
multinational firms
MNE
JEL: 
F23
H25
K34
Document Type: 
Working Paper

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