Taxation and the Global Allocation of Intangibles

Jesse LaBelle, Fernando M. Martin and Ana Maria Santacreu
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Fernando M. Martin: https://www.stlouisfed.org/research/economists/martin

No 2025-025, Working Papers from Federal Reserve Bank of St. Louis

Abstract: We study how international tax regimes affect the allocation of intangible assets using a new dataset on global patent transfers and a structural model of shifting decisions. Empirically, patent transfers respond strongly to statutory tax differentials during 2007–2012 but much less after major reforms. In the model, heterogeneous patents choose between licensing and shifting based on tax wedges and setup costs. Calibrated to observed shifting rates, the model matches the concentration of royalty income in low-tax jurisdictions. Counterfactuals show that harmonizing tax rates greatly reduces shifting and raises revenues, whereas modest minimum taxes have limited effects.

Keywords: intangibles; cross-border patent sales; licensing; profit shifting; taxation; intellectual property rights (search for similar items in EconPapers)
JEL-codes: F12 O33 O41 O47 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2025-09-29, Revised 2025-12-19
New Economics Papers: this item is included in nep-acc, nep-bec, nep-ipr, nep-pbe and nep-pub
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DOI: 10.20955/wp.2025.025

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