The Impact of Headquarter and Subsidiary Locations on Multinationals' Effective Tax Rates
Chapter in NBER book Tax Policy and the Economy, Volume 28 (2014), Jeffrey R. Brown, editor (p. 33 - 62)
We examine effective tax rates (ETRs) for 9,022 multinationals from 87 countries from 2006 to 2011. We find that, despite extensive investments in international tax avoidance, multinationals headquartered in Japan, the U.S., and some high-tax European countries continue to face substantially higher worldwide taxes than their counterparts in havens and other less heavily taxed locations. Other findings include: (a) Effective tax rates remained steady over the investigation period; (b) Entering a tax haven country for the first time results in a slight reduction in the firm's ETR; (c) ETR changes vary depending on whether the subsidiary is a financial conduit or an operating subsidiary. These results should aid ongoing international tax policy debates and expand scholars' understanding about the taxation of multinationals.This chapter is no longer available for free download, since the book has been published. To obtain a copy, you must buy the book.
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Document Object Identifier (DOI): 10.1086/675587This chapter first appeared as NBER working paper w19621, The Impact of Headquarter and Subsidiary Locations on Multinationals' Effective Tax Rates, Kevin S. Markle, Douglas A. Shackelford
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